Summarize your Finance Package

Summarizing your finance package can help to prioritize how your banker reviews your financing request.

We recently submitted a client’s financing request to one of the Lenders on our lending matrix.  Our Lender Rep. said, “Holy cow, you guys are on top of it with your summary. Not many brokers make it this easy to review the package.”

We made it easy because the client provided us with their financials. The financials were comprehensive. It’s a multi-million dollar corporation and we’re at the early stage of presenting to the lender. We want to show something that’s easily digestible. We want to ease  the process for the lender to give us a prompt review and tell us their interest in offering the financing.

Summarizing your financials is easy to do.  When you have a lot of line items that lead up to one type of deduction or one type of income source, simply summarize it. Drop it down to as few lines as possible so the lender can do a quick review and say,  “Okay, I see the picture here.”

The Lender doesn’t need to know the granular line-by-line details at this early stage; you want the Lender to give a fast review to gauge their interest. If the Lender expresses interest and offers a Letter of Intent for the financing, you can present the more detailed financials with your full loan application package.

For each client financing request, we write a summary statement. We present a one or two page statement describing some background on the business, the reason for their financing request, and, in bold, large font, the amount of our financing request.

Our presentation package for the initial Lender review is compact, yet complete.  The “first glimpse” by a Lender is sufficient to tell us if that particular Lender is the right fit for our client’s request, or if we need to locate a different Lender.

Watch our Financing Fodder YouTube playlist to understand what you’re up against when applying for a business loan. 

Download your “Homework”. You’ll thank us later

Stop worrying about what's required when pursuing a business loan for your small business. This list will indicate what a lender, bank, SBA, etc. will want to know about you and your small business if you're looking for a business loan. These are prudent documents that help tell your small business story. Without them, it's difficult for lenders to assess you as a risk when it comes to lending your small business money. This is NOT SPECIFIC to the SBA EIDL loan.

Four Metrics to Monitor for Profit

To monitor your bottom line profit you need to put some fundamentals in place.  Once those foundational elements are implemented, you next need to create a monitoring schedule to check in on your profits.

Again, we’re not suggesting anything that is revolutionary in the world of running a business.  But we’re presenting these suggestions based on our real world conversations with business owners as we interview them to begin searching for credit financing solutions for their businesses.

In other words, as obvious as this advice might seem, we’ve encountered many business owners who don’t have these fundamentals in place for their business. If they do have these building blocks established, we discover their systems for implementing and monitoring are only one step removed from “back of the envelope” calculations.

We want you to do incredibly well with your business!  We’re presenting this obvious advice to help you organize these basics in a way that you can almost say to yourself, “Set it and forget it!” This leaves the system in place and removes so much anxiety and impatience from the day to day operations of your business so you can dig in to the two things that count most: loving what you do and building your business to even bigger scale!

The 4 fundamentals to measure profitability.

Timeline.  What is the sales/production cycle for your business?  Create a realistic expectation of when the cash hits your bottom line by reviewing your past three years performance.  Look at your previous cycles.  Calculate the turn times on when you delivered your product/service, and when you realized the cash injection to your bottom line.

Production Costs. While your production timeline might be, for example, three weeks, you must ask yourself if any production costs linger after the production cycle.  Are there delayed payroll expenses?  Are there residual expenses for cost of deliveries (freight costs, internet marketing costs, re-tooling expenses for next production run, Accounts payables to outside vendors necessary for the production cycle)?

Receivables.  Review your Accounts Receivables aging reports for the past three years. What is the true timeline when you receive better than 90% of the cash income from your receivables after you’ve sold your product or service?

Delays.  With each of the above three fundamental criteria, add a percentage variable to account for delays. What happens if there’s a slowdown in your ability to deliver your product/service? Add that into your calculation. Same for cost overruns that could lead to extended time periods of production costs

(What if your current freight delivery provider can’t manage the extra volume of a large order and you need to bring in another provider? What if you needed to add three more freelancers to complete video/content/production or implement design elements?) 

Same with your receivables. Assume the worst for your slower paying receivables and add delayed payments to your calculations.

Time To Check Your Profits.

Once you implement the above four fundamental monitoring elements, now create a schedule to check in on your profits.  Get it in your calendar!  Lock the door!  Give yourself (and your management team) time to focus solely on this aspect of your business.  No interruptions, and answer the question: where do we stand with profit?  If you’re profitable, what’s your bottom line number and does that match your expectations from your Business Plan?

Throw in the additional calculation: margin. Compare profit to expense. On a per product/service delivery price, what is the exact percentage in your profit column?

In the final analysis, literally, you’ll have a clear understanding of your profit.  When you comprehend in clear terms how you derive profit for your business you can then think about how to improve profit.  You may find yourself discovering new opportunities for profit centers and thus new products/services.

You may be pleasantly surprised that you’re more profitable than you thought you were.  Then you can decide what to do with that extra income, to plow it back into the business, to create cash reserves, maybe make bonus payouts to ownership, make charitable contributions, or take a vacation!

Again, what we’ve found is that many business owners lack a clear picture of their profitability in terms of hard numbers, metrics that you can see on your computer screen.

These fundamental systems may seem daunting in terms of the investment of time and money to implement, but, like any other feature of your business, once you’ve put them in place, not only will they help you with clarity of your profitability, but you’ll only need to tweak these existing systems in years to come as you grow your business by leaps and bounds!

COVID-19 Recommendations For Your Business Survival

We were recently invited to attend a professional event as guest speakers. At first we thought we would attend via video conferencing. We then discovered that the event organizers expected us to physically visit their office to participate in the event. This raised serious concerns for us, especially since Trevor was ill with COVID-19 over the Summer.  We sent an email to the event organizers expressing concerns and asking a series of questions about their safety protocols.

As soon as we hit the “SEND” button, we realized they could have been more proactive in providing information to us FIRST about the safety protocols. Thus was inspired the following advice to our business owners. We hope you will find this useful. We welcome comments about this advice.

DO MORE FOR YOUR CUSTOMERS WITH YOUR COVID-19 SAFETY PROTOCOLS AND MESSAGING

The time is right for you to help your customers with concerns about visiting your business. Step up your safety protocols and your message about those protocols. Many more Americans are aligned with recommended safety guidelines including mask-wearing and social distancing. As a business trying to survive through this pandemic, get the word out to more people that you understand their concerns.

With the ongoing COVID-19 crisis your customers have concerns about meetings outside of their home or office. Be proactive in your understanding of their concerns. Apart from any local, State or Federally mandated safety protocols, determine how you can add to those fundamentals. If you’re not required to provide free masks, do it anyway. If you’re required to have a certain size of plexiglass divider, install larger dividers. If you’re required to have a specified number of hand sanitizer stations, add more.

You can’t really go “over the top” during this pandemic; the more you do to acknowledge the concerns of your customers about their own safety and that of your employees, the better the likelihood of increasing your customer attendance.

Once you’ve done that, then you need to “go tell it on the mountain” and broadcast the level of protections you’ve implemented.

Get the word out through every channel possible. Your messaging could include a phrase like this: “We want to provide you with assurances of safety protocols before you visit our store/restaurant/office. We want you to feel safe during these uncertain times.”

With messaging like this, you are both acknowledging the “pain points” that many people are feeling and you are increasing the numbers of customers likely to visit. It’s not enough to attract customers who already feel more comfortable going out and about during the pandemic with less anxiety; you need to pry the other, more anxious customers out of their protective environments.  Your message and your protocols will accomplish that goal.

Take a proactive stance that can only raise your customer’s confidence in your attempts to keep them safe. We have some suggestions for advance messaging before a customer visits your office/store/restaurant:

  1. Consider providing a list of the safety protocols you’ve implemented. On the list, note which ones are government recommended and which ones you’ve added for the extra level of caution.
  2. The next suggestion is a really difficult concept because you are acknowledging the customers’ concerns in a way that many businesses fail to do. Essentially, you’re going to remove some of the burden of safety precautions from the customer.

While it may seem that the following questionnaire might frighten away people, we believe the opposite to be true: you will actually attract more customers.

Understand that the vast majority of Americans are already worried about being infected with the COVID-19 virus. Ignoring that concern, assuming that everyone is taking precautions into their own hands or trusting a business with only minimal safety protocols is a fatal mistake for a business trying to survive the pandemic.

Become a “partner” with your customers by acknowledging their worries. Create a dialogue to demonstrate your intense interest in their safety and that of your employees.

We recommend that you include in your messaging these additional information points about your focus on the safety of your customers and employees:

  • Describe how many other people will be in attendance on the day of the event/meeting/reservation, including before and during your customer’s visit.
  • Provide detailed descriptions of the protocols in place currently at your business.
  • Provide a diagram of the business space demonstrating the measurements in relation to your customer’s ability to maintain social distancing. Note the plexiglass and hand sanitizer locations on the diagram.
  • We recommend you send a questionnaire to customers either before they attend a meeting at your office or visit your store/restaurant. Make this questionnaire part of your safety protocols in advance of the customer’s visit.

We know that many businesses are providing a short form of this questionnaire only at the moment of entry. In our opinion, while this is compliant with recommended guidelines, it doesn’t do enough to soothe the worries of many more people. And you want to attract as many customers as possible to survive this pandemic.

We’ve set up a minimal questionnaire. You’re welcome to copy this and use it along with your local, State or Federally-mandated questionnaires:

Please REPLY to this email with your answers to the following questions so that we can assure your safety of you and the safety of our other customers:

  • What is your personal opinion on mask-wearing requirements? 
  • Do you wear masks constantly, occasionally, rarely, or never?
  • Have you been diagnosed with COVID-19 or been in proximity recently with someone diagnosed with the virus?
  • Have you attended a social or professional event with more than six people in the last 30 days?

We recommend you provide this questionnaire, along with the list of safety protocols at the moment a customer confirms attendance at a meeting or even when they make a reservation at your restaurant. We know that many business owners may be fearful that such communications may actually scare customers away. Frankly, we cannot imagine how your interest in clear communications and a dedication to customer/employee safety can be more frightening than the actual COVID-19 virus!

Remember that you want to attract the customers who are taking extreme precautions. They may even be the customers reluctant to venture out of their homes.

Wishing you the best during these difficult times! Stay safe, stay well.

3 Metrics to Watch

We find business credit financing solutions for business owners.  We also find that many business owners hold anxious trepidations about the concept of borrowing money.

Yet, the need does arise for working capital to continue to grow your business success story.

Whether the working capital need is unexpected–due to an unusually large order from a customer, a seasonal downturn in revenues, or a sudden opportunity for growth such as purchasing a competitor–or a planned requirement such as equipment purchase or investing in a new marketing plan, your business will need capital to grow.  Unless your profit margins or cashflow planning have created a massive pile of cash for just such a capital expenditure, you’ll need to go outside your company to find that money.

The alternate choice to credit financing is to bring in capital from other equity sources.

Refinance your personal home or leverage your retirement accounts and bring in the required capital.  Sell off valuable equipment, ideas, collectibles.  Bring in an equity partner.   We’ve pontificated at length about the last option…do you really want a partner who may wind up telling you “how to make the pizza?“

There are many reasons why choosing equity sources for capital infusions are bad for you personally and professionally.

Yet, too often this is the path chosen: equity sources.   Business owners go down this path for several reasons: time-constraints to obtain the capital; anxiety around the idea of borrowing.

Credit financing to obtain working capital doesn’t have to frighten the heck out of you.  At Aurora Consulting, we understand the worries that come along with borrowing money: “What if there’s a downturn in my business and I cannot repay this loan?”

Especially after the global meltdown and subsequent recession of a dozen years ago, lingering fears and doubts remain laced through our economy and our economic thinking like clogged drainpipes during a sudden torrential downpour.  The water has to move, and move quickly, but the remnants of various and miscellaneous flotsam and jetsam are jamming up the pipes and the rainwater backs up causing all kinds of other problems.

The same is true of these lingering doubts about borrowing money.  Credit can be a good thing and nothing to be fearful of when approached sensibly and when the credit terms are incorporated into your business planning.

Still, these worries hang on.

We’ve come up with the concept of 3 important business metrics you can keep an eye on after you’ve borrowed that needed working capital.

Remaining vigilant on these metrics can help you avoid a sudden negative revenue issue which could lead to default on credit obligations.  While it may seem obvious to you that these are the metrics ANY business should constantly monitor for maintaining profitability and continuing growth, as with all advice and observations we provide from Aurora Consulting, our real-world experiences demonstrate these ideas are not so obvious to every business owner.

What is obvious is worry and anxiety.  Thus, our presentation of these not-so-revolutionary-ideas.

  1. Profit margins: pricing and expenses
  2. ROI: products/marketing plans/infrastructure/product development
  3. Customer Retention/Construction

Monitor these important metrics by maintaining your financial reporting to the most current and efficient methods.   We often see businesses with financial statements such as P&Ls and cashflow statements that are not up to date.

A balance sheet isn’t just for your CPA to use when you’re filing your tax return!

And the ever important marketing and business plans?  Wow, we are constantly shocked when we request these vital documents from our clients to include in a financing request package only to be told they don’t have one!

Creating and maintaining these financial reporting documents is incredibly easy with the sophisticated computer applications available, even for your smartphone!

Making the time to check  in with them is another thing altogether.  We sometimes feel as if our clients present us with financial statements and they haven’t reviewed them, recently, or ever.

That’s why we suggest you at the very least monitor these three important metrics on a constant and vigilant basis. WHY?

First, it’s good for the overall health of your business.
Second, you will find you can anticipate challenges and successes before they arise.
Third, you can plan for those challenges and successes well in advance and avoid nasty surprises and cashflow chokeholds.

Finally, and best of all, you can lower or maybe even eliminate altogether your anxiety and fears of credit financing capital to grow your business.

The Truth About Credit “Repair”

The most fundamental truth and reality check is this: a consumer cannot “remove” an account that is legitimately your account that is showing on your credit report.

While the account may appear to removed during the dispute process on the report provided by the credit bureau, the reality is that account is most likely to return to a credit report at some time in the future because it’s your account.  This is true whether it’s a positive or negative account.

In other words, if that account was truly yours to begin with, it’s going to reappear at some point on the credit report.  The confusion arises from the dispute process. During the dispute, the credit bureau is required by law to remove the disputed account from the credit report while they investigate the validity of the information with the original creditor.

Often, the bureau provides an updated report showing the removal.  And the investigation process, required to be only 30 days by law, often takes longer. Thus, the credit bureau “extends” the 30 day investigation period, and representing to the consumer that the information has been removed during the investigation.

This is the part where you need to pay attention.

This is one of the major frauds of the entire credit repair concept.  Once the credit bureau receives the accurate information from the original creditor, that account goes back onto the credit report.

A credit report can only be “repaired” to the extent that incorrect information can be amended to accurately reflect:

  • Correct status of an account (such as paid)
  • Removal of a duplicate account (often happens when a minor discrepancy in account balance or account number is reported by the creditor)
  • Removal of an account from a family member with the same name that appears on your credit report (John Jones Sr. mortgage appears on John Jones Jr. report)
  • Correct name misspellings or home addresses, and other personal identifying information of that nature.

Closed accounts aren’t necessarily the problem with improving a credit score.  That’s only one component of the overall scoring algorithm. What most consumers with decent credit misunderstand is their use of their current accounts. Such as, the more legacy accounts you have open and active today, with 50% or less utilization (relative to credit limit) and an on-time payment histories, will generate a better score.

Even with a higher utilization of 50% or more on several revolving accounts, assuming 3-5 active accounts with two years or longer histories and active use, scores can be very good and even excellent.

Please reach out for any further clarification. This is where we see most consumers flail with thinking through the process of “repair” and/or hiring someone to manage the minutia, which will only result in frustration and regret.

When we work with our business financing clients, we include a merged credit report with Classic FICO scores from Experian and Equifax as part of our qualification process from the very beginning.

Most Lenders won’t run a credit report until late stages of the loan application process. Our method helps us to understand and advise the business owner of any challenges on the credit report that may impinge on our ability to secure financing from a Lender.

Trevor, our Chief Financing Rock Star, was a Mortgage Banker for 30 years; credit is one of his areas of special expertise.

Download our E-Book, “Rebuilding Your Credit After COVID”.

Maybe you haven’t filed for bankruptcy; you will still pick up some tips in this ebook.

We Anticipate Problems to Create Solutions

Our Process Anticipates Problems, Creates Solutions

The good news is that Banks are lending again on a limited basis for non-disaster loan requests.  The bad news is that the loan products are limited and the underwriting guidelines are very, very restrictive.

Many industries/businesses are excluded from loan programs.  Banks simply cannot determine yet the viability of the businesses to survive the pandemic. Risk is too high and thus doors to the lending vault are tightly shut.

Today we spoke to a Bank on four different loan scenarios. Each of these businesses has challenges on their loan applications of different sorts, whether it’s credit, cashflow, type of business, COVID-19 impact on the ability of the business to earn income.

In the hour-long conference call with the Bank, thanks to our qualification process here at Aurora Consulting, we easily addressed the Bank’s concerns and answered their (often) difficult questions as they assessed the risk on each loan scenario. In three out of the four scenarios, we received positive feedback of interest from the Bank. While this interest does not guarantee a loan approval, this, in our experience is a giant hurdle we overcame. 

The rest of it is the loan process.

We also spoke today with a prospective new client in a follow up to our initial call last week.  This client seeks over $4Million in funding for a unique business, a business for which many Banks and Lenders do not provide funding due to their lack of understanding of how this business operates.

We had already identified a Lender for this financing request.

In our follow up call today, the prospective client indicated they would soon make a final decision on moving forward with Aurora Consulting to secure the financing. They also indicated they were working on their credit.

STOP. RIGHT. THERE….BEFORE we go any further. (Meatloaf medley playing).

A client should not “work on their credit” without proper guidance. Luckily, we provide that kind of guidance here at Aurora Consulting. While we don’t believe in credit repair/restoration, we do have decades of expertise with credit and we also know the appetite of commercial lenders when it comes to credit. Note: We have not yet seen this person’s credit.

Our process at Aurora Consulting includes running a credit report as soon as we sign a consulting agreement with a new client. We do this so that we can anticipate any issues that could slow down or prohibit the lending process. We do this upfront so that we can provide advice that leads to a positive result for our clients.

The same holds true for our entire process. We review all financial statements, business plans, marketing plans and any other pertinent items in the early days of working with a new client.  

We do this to anticipate and resolve problems a Bank or Lender may have in the future.

When you apply directly to a Bank/Lender for commercial financing, these items, credit reports, financial statements and the like, are not seriously reviewed until the very late stages of the loan application process. By then the applicant has spent time collecting and submitting documents and spent money on application fees, appraisal fees and other associated costs.

Literally most Banks/Lenders do not run a credit report until the very final stage of the application process, weeks or months after the initial application. At that point, if a credit issue arises on the credit report, all those weeks and months of work are quite literally flushed down the toilet and the loan is declined.

Our role as your financing Broker is to review all relevant documents, including a credit report, in the early stages of your request, before the application, before we’ve even considered conversing, in depth, with a Bank/Lender.

That’s why today, we hit the mark with 3 out 4 of our loan scenarios getting the green light from a Bank to move forward to the application process.  

We were prepared for every question and concern the Bank had because we’d reviewed credit and documents. We anticipated problems in advance and could converse honestly with the Bank on possible workarounds for those problems.

It’s what we do, because we are the business-owner’s advocate. We work for the business-owner. We would be remiss if we didn’t share with you that banks call us when they can’t underwrite the loan. So we understand their process.

Ask us any questions when it comes to business loans. If you want your business to survive, and THRIVE despite the worst crisis we’ve seen in our lifetime, please call us with your questions.

Email Curious@AuroraConsulting.biz

Tough Questions from Lenders

The good news is that Banks and Lenders are opening up their coffers to provide business credit financing. The other news, that’s more anticipated than “bad,” is these Banks want business owners to answer some tough questions about preparedness for further pandemic-related challenges.

If you are applying for business financing—a loan or line of credit—that’s not Disaster Relief-related, here’s a sample from one of our Bankers on what to expect:

  • How has your business been impacted throughout the crisis?
  • How have you and your employees been affected? Your suppliers? Your customers?
  • What are your key priorities over the next 30/60/90 days?
  • How do you anticipate accomplishing these goals? What hurdles do you anticipate?

To achieve a successful response to your application, you should answer these questions with all appropriate gravitas and extreme detail.

  • The Bank wants to know that, should the pandemic-related lockdowns get tighter:
  • How have you planned to get through that?
  • Do you have cash reserves?
  • An employee-furlough action plan?
  • Do you have the ability to provide your services or products with a serious downturn in customer traffic (think early days of lockdown)?

Banks make loan decisions by assessing the risk on the credit profile of the Borrower. As with any aspect of a loan application, the COVID-19 pandemic has created another layer of risk for Banks. Your successful loan application will take that risk assessment into account as you prepare your application for submission by anticipating how to make a Bank/Lender get into a “comfort zone” about your ability to make payments on the loan as other challenges from the pandemic arise.

Download our documents checklist so you’re properly prepared. You have to be better than the lender because they’re trained to say “NO THANK YOU”.

Subscribe to our Financing Fodder playlist on Youtube.

Download “Homework”! You’ll thank us later!

Business Financing Documents Checklist

Stop worrying about what's required when pursuing a business loan for your small business. This list will indicate what a lender, bank, SBA, etc. will want to know about you and your small business if you're looking for a business loan. These are prudent documents that help tell your small business story. Without them, it's difficult for lenders to assess you as a risk when it comes to lending your small business money. This is NOT SPECIFIC to the SBA EIDL loan.

How To Shop Financial Services Products While Black

We have worked in Insurance and Banking for three decades.  We have seen how our White colleagues behave when discussing internally, or when working directly with persons of color.

This video is difficult to present because we don’t dare presume that we know what life is like to be Black in America. We can only empathize and attempt to put ourselves in your shoes.

We share some advice on how you should expect a financial services professional to behave if they are treating you with the equal respect they provide to their white clients.  We created this advice based on how we have behaved with clients, knowing that we have standards that are severely Anti-Racist, and how we have observed other professionals with less savory standards behave.

  • Language.  An Anti-Racist uses language that is respectful at all times, not only the words used, but the tone of voice used.
  • Education.  The quality professional, treating all customers equally, seeks to educate clients. They bring to the presentation deep reserves of patience and empathy.  They never behave in a way that disrespects the client’s lack of knowledge about the service or product.
  • On-Time. Your Professional should be on time and prepared for the meeting/call.  This demonstrates their ability to take you seriously.
  • Respect. The Anti-Racist professional never speaks down to a client.  The Anti-Racist professional asks questions with a patient demeanor or explains things in plain English with a respectful tone.  For example, “I’m asking for your Identification because I’m required to do so for every client when we will run their credit report.”  That’s respectful and seeks to demonstrate a patient educational tone.  The opposite is, “I need to see your ID.”
  • Polite. Language and words truly demonstrate how a person thinks.  When a person is polite to a customer, they use the appropriate words such as “Please” “Excuse me” and “Thank You.”

We recommend that you, as a Black American, or a person of ethnicity or different gender, absorb these key points of behavior and, most importantly, act on the points with the best action you as a consumer of financial service products can take: Walk away.

Too often, we’ve seen an African American customer being treated badly by a white professional but that customer stays in the meeting.  Walk away.

The best way to demonstrate your requirement that you be treated equally is to walk away from, or hang up the phone on, any financial services professional who you feel is not sufficiently Anti-Racist. There are plenty of us out here in the world who know how to treat our fellow human being equally and with respect.

Walk away from the racists and find those of us who are Anti-Racist.

We’re here and we’re waiting for you.

3 Things to Expect From Your Insurance Broker

I’m going to hit you between the eyes, and you may like it, but not at first. I’d like to think I know a couple of things about insurance.

I’ve worked in the Insurance Industry for over 30 years.  My ultimate accomplishment was owning an Independent Insurance Agency. Additionally, one of my favorite clients trains insurance agencies so I see what thousands of agencies do wrong, every year, all across the country.

Here it comes, the part where I hit you between the eyes:  Your Insurance Broker may not be servicing you properly, and it could be costing you money, and maybe a lot of money.

I know, I know, insurance isn’t something you think about all that often, maybe once a year, when it’s renewal time. And, that’s when you discover how your Insurance Agent is managing your account.

Maybe your premium went up. A lot. And no one from your Insurance Agent’s office contacted you to let you know that they are aware of the situation. So, you go through the strife and stress of dealing with that situation, whether you go through the motions of switching to another company, or you complain and ultimately pay the higher premium.

You get through the moment. Then, return to your normal life. Until the same thing happens next year when you’re stressed out again.

My Insurance License in Connecticut is still active. I kept it as a matter of convenience for the occasional client. During the pandemic and the assistance we provided to thousands of business owners seeking disaster relief funding, we were exposed to many other elements of their operations, including their insurance, as part of the financing process.

When I see how business owners are being serviced by their insurance professionals I am, quite frankly, surprised and confused. What I see most often is these businesses have insurance policies where their business is under-insured, over-priced, and minimally serviced.

I didn’t run my Independent Agency that way nor for the clients we assisted during the pandemic. Your insurance agent or broker is a licensed professional and as such, they should be doing these three things.  If they’re not doing these to honor your business relationship, then you may want to consider who is managing your insurance.

  1. Annual Review. Your Agent should contact you 60-90 days prior to the policy renewal to review your current policies. The review should include questions about the status of your business and plans for the future. They should be reviewing current coverage and premium as well as other life changes so that could affect the policy and any potential claims.

  2. Updates on Coverage. Insurance Carriers can change their underwriting standards from time to time. It’s up to your Agent to be aware of those changes and to update you when those changes can affect your insurance, negatively and positively.  Your Agent is the one with their finger on the pulse of the industry, and as a licensed representative, while you’re busy running your business.  Your Agent should notify you when a change will affect your business.

  3. Servicing the Heck Out of You. Practically every business owner I’ve come into contact with in my financing business states that they never hear from their Agent. When we needed an insurance document for their financing, the process of obtaining that document takes longer than necessary because of the lack of communication. The Insurance business is a SERVICE business.

For more simple but boring basics of running a business, check out our Biz Glitch 366 Program

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The Dreadful Disorganized Document Disaster

Our resident Chief Financing Rock Star, Trevor Curran, was a Mortgage Banker for 30 years. His specialty was helping first time homebuyers with low down payments to achieve the American Dream of Home Ownership. From the early days, with no computers, no internet, no email nor a beeper on his belt—until the day of his retirement in 2018, a mortgage loan application was all about the paper. Documents to support the application needed to be submitted, reviewed, dissected, parsed, and collated. Trevor’s clients submitted their documents in many and varied ways, including coffee-stained tax returns, crumpled paystubs pulled out of an old wallet, and badly-scanned PDFs. Considerable time was spent by Trevor and his loan processing team to put these documents into a manner acceptable for review by an Underwriter. And of course there was the pushback from clients. “Why do you need that (document)?” “I can’t find my tax return.” “The dog ate my homework.” Oh, wait, wrong story. Trevor’s response, time and time again, including in the early days when he would literally drive to the clients’ home, workplace, a McDonald’s parking lot, or the real estate office, to pickup their required documents, was, “We need these documents because the bank requires it since you’re asking the bank to lend you several hundred thousand dollars.” This obvious message was delivered in a kind and patient but firm manner. Still, it always seemed incredible, time and time again, how people could be so cavalier about their loan application requirements. “Don’t they want the house?” he would often ponder in the moments of extreme frustration. Now, as the primary processor for Aurora Consulting, Trevor’s manages the document flow and the loan applications for our business clients. When we launched this business we remember discussing how this document issue is going to be so much better because we’re dealing with serious business people. Unfortunately, we were mistaken. Especially over the past eight weeks as we have assisted over 30 businesses to apply for and receive Government Disaster Relief financing, the poor quality of document management is mind-blowing. Especially at a time like this, when the desperation of keeping a business alive requires this emergency infusion of cash. You’d think business owners and their representatives (CPA’s, mostly) would be sharper than ever to get documents submitted in an organized and prompt fashion. Again, mistaken. Moral of the story for anyone thinking they want to ask a Bank or Lender for money—whether you’re buying a house or financing a business—it’s all about the paper. Organize your documents, submit them in a clean, efficient manner, and submit them promptly. Rant over. Send us a message with how you’ve successfully managed your team to understand your high level of standard when it comes to managing your documents.

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