Give Him What You’ve Got


By Dave Miller

Your banker holds the keys to many things.  If you are found in his good graces a nod can grant you freedom. But he can wave you off just as easily if you are weighed in the balance and found wanting.

If you are attempting an expansion in your business, you may need a larger line of credit or a term loan. Or maybe you need capital to buy a piece of equipment for that big job you quoted. Maybe your goal is to own your own home or real estate as an investment. Whatever your dream or need is, you probably need capital.

You may have the cash to buy it outright, if so, I commend you. You have done well. 

If you are in need of capital, you are at someone else’s mercy.

The three most popular methods are owner financing, private money or the bank. Of these three the conventional route is to call the bank.

Whoever you rely on, your relationship is crucial. The bank being the most commonly used method of financing; we will focus on this relationship. Nevertheless, these tips can be used for financers other than your banker.

Bankers love paper, or so it seems when I want money. First they ask for a copy of my tax returns for the past couple of years. It is preferred they pick them up with a pickup truck as my return is 83 pages long and my wife’s weighs in at 45 pages. Then they walk in with a towering stack of papers for me to sign. I see visions of dead trees. O Death; once lush vegetation laying down its life for me and my loan.

If it’s paper they want, then paper I give.

When I approach a banker for a loan on an investment property I provide him with a report. Excel is an excellent way to create these reports. I have a template ready and all that’s needed to do is fill in the blanks. This spreadsheet does all my calculating. In five minutes I can have a presentable four page report. This is the same way I evaluate properties before I look at them. Provided in this report are an income statement, cash flow statement, repair costs page and cost analysis. With a few more clicks I can add an amortization schedule.

I have used some version of this report while asking for financing in four deals over the past two years. Each time the banker has made positive remarks about the report. My goal is to keep the banker happy. If it helps to give him a presentable report that takes five minutes to make, then five minutes it is.

An annual ritual I have happens after my taxes are done. Bankers love tax returns. They view them as the Holy Grail. The sooner they have their paws on them the happier they are. I send them my returns even if I’m not asking for money at the time. A local banker, Bill O’Brien, once told a group of businessmen the way to impress a banker is to send him your tax return on April 16th .

I always ask my accountant for a PDF of my returns. I then send them via email to my banker. By having this on file you can have it to someone in two minutes via email. It is a fast and easy, and no tree died in the process.

A list of additional information I send in my packet:

–      Updated Personal Financial Statement

–      Personal Federal Tax Return (previous year)

–      Previous year LLC Federal Tax Return for investment properties

–      Income Statement and Balance Sheet for business

–      Income Statement and Balance Sheet for my investment properties

–       Year to date Income Statement and Balance Sheet for business and investment properties

So the number one way to impress your banker is to make a packet of the above mentioned items and send them his way. Oh, it also helps if the numbers on the paperwork are respectable. Either way, at the least, send your banker your previous year’s tax returns.

Quotable Quote:

A banker is a fellow who lends you his umbrella when the sun is shining, but wants it back the minute it begins to rain.  – Mark Twain

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Published in: on June 4, 2010 at 8:55 pm  Comments (2)  
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2 CommentsLeave a comment

  1. […] Click this link to read an article I also wrote on keeping the your lender happy. […]

  2. […] Click this link to read an article I also wrote on keeping the your lender happy. […]


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