1. Badmouthing your previous banker. Chalk it up to nervousness, or sheer ineptitude, but all too often, facing a banker across the lending desk has a loosening effect on the tongue. If you must ramble, confine it to innocuous small talk, and don’t ever say disparaging things about another lender to a banker.
2. Offering verbose explanations. The longer your response, the more suspicious you appear to that number cruncher, who at this point, is peering intently at you from across that polished mahogany desk. Think you’re fooling anyone with all that excess verbiage? Any banker worth his or her salt knows it’s a ploy, and will assume you are merely obfuscating, because you lack meaty analytical data to back up the request.
3. Coming to a meeting unprepared. Don’t wait until the day before you meet with the lender to pull your numbers together. And, remember that bankers love spreadsheets. Have yours in hand, and be ready to answer any questions about your business data.
4. Lying through your teeth. That’s a bad move, because false information will be ferreted out, and then you’ve most certainly blown your chances at securing a loan. If the lie is not discovered through an interview with your banker, then it will likely be found through a look-see at your corporate tax returns. Remember the residential lending crisis? This is a new era, in which lenders expect a very high level of accurate financial disclosure, before they agree to lend you money.
5. An unwillingness to provide collateral. The era of unsupervised playtime with someone else’s capital is over. You will be expected to pony up collateral for a loan. Take the time to calculate an estimate of the current value of whatever collateral you are prepared to put on the table. The banker will run his own figures, but you’ll gain credibility, because he’ll know you are serious about the request.
6. Tardiness in responding to information requests. Expect your banker will ask for additional information. Answer those queries in a timely manner, as any delay may raise additional questions in regards to your responsiveness. He or she may assume that if you’re tardy with data, you may also be tardy with payments.
For more tips, check out this article on “Your Banker’s Six Dirty Secrets.”