PROBLEM & SOLUTIONS to Dealing With Bankers 

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Most loan officers, now look at deals trying to find issues with them, so that they can decline them quickly, and move on as soon as possible.  This is contrary to the more traditional mentality of trying to figure out a way to get loan requests done.

The worst thing you can do now, when working with a loan officer, is submit an unorganized loan package.  If you are missing documentation and or are slow to respond, they will most likely blow you off or straight out decline your request.  Again, they are cherry picking!  You have to be more prepared than ever before. 

Also, remember that the loan officer you are working with is going to have to SELL your loan to the underwriters and to upper management/the committee to get them interested.  Keep in mind, that the loan officer has almost no lending authority.  They act as a screener and an “ambassador” to loans they like, but they cannot make a credit desicion.  So you need to give that person the evidence they need to push it through the system.     

And the loan officer can unfairly hurt your request.  The internal process of submitting a commercial loan to a bank is far from perfect and very political.  For one, if the loan officer that you are working with is not well respected internally, at the bank, he will not be as effective at selling the loan to upper management.  Two, he could make MISTAKES by not knowing the loan programs good enough or by erroneously calculating your income on both your business and personal expenses (the most common example of this is having items such as your business car payments/credit cards being counted twice and thus reducing your cash flow).  Three, he could do a poor job of communicating the loan request in general to the committee, and underwriters.  So you want to work with a successful and highly productive loan officer.   

For you, as the individual trying to get your small business loan closed, you need to be PREPARED…  You need to be prepared to point out your strengths and to overcome their objections quickly.  When you submit your loan you have to anticipate what they are not going to like about your request and have your answers/solutions prepared and ready to go.  And do not bother to try to hind anything.  Disclose your issues in the beginning to save time. 

Most Important Advice

If you have already been declined by a few banks, make sure you find out WHY, so that you can address the problems…  for when you move on to the next lender…  This is critical.  Ideally you want to fix the problem and or to put it in the most positive light. 

All in all, you want to have the application and underwriting process go as smoothly as possible.  You do this by being ready to answer their questions and providing the documentation they need as quickly as possible.