In Commercial Financing, Finance, Financial Documents, Loan Approval, Manage Expectations, Working Capital

Ever heard of too many chefs in the kitchen? You know how it goes. There’s a bit of chaos, too many people involved in making decisions.

In a perfect world you’d get your credit decision very quickly. From your Banker.  You have all your relationships there, with your Banker.  You believe they know everything about you and your business there is to know because of those relationships.  And you’ve been a loyal customer for many years.

So when you find yourself growing your business and suddenly needing working capital to fuel that growth, your first instinct is to contact your Banker.  Because of the relationships. And, knowing the value of your relationships you truly believe your Banker can give your financing request prompt consideration and a quick decision, yes, or no, on the application you’ve submitted. In the banking lingo it’s called a “credit decision.”

A decision based on the entire credit profile—income, cash flow, business plans, credit, debt, etc.—to either approve your financing request or to deny your request. After all, your time is very valuable and your business is growing; you don’t have time to waste if a credit decision isn’t going to go your way.

But there’s an entire system at the bank where it’s out of the hands of your Banker to make that quick credit decision.  There are Underwriters and processing staff involved to review your credit profile, to compile notes and compare everything against the Bank’s guidelines for lending.

And still you wonder, “What about my relationship?”  Yes, your Banker is your go-to person who have been so valuable to you as you’ve grown your business to this point, guiding you with the right accounts and products.  So, why can’t your Banker give your loan request the once-over and tell you, honestly, and based on your longstanding relationship and the bank’s guidelines, if the request will result in a “Yes” or a “No?”

The answer is simple.  Your Banker is not permitted to make credit decisions.  Any of them. Your Banker wants to help you, wants to maintain the worthiness of your relationships.  But your Banker’s hands are tied because she is not permitted to make credit-decisions on behalf of the Bank.

Your Loan Application must go through the system.  Later, if the system fails you or doesn’t meet your expectations, even if you are approved for the financing, you may want to blame your Banker and ask, “Why couldn’t they tell me this from the beginning and not waste my time?”  Because they can’t, that’s why. Telling you from the beginning qualifies as a credit decision, and that’s out of their hands.

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