Article by Roger Schlueter
THE LARGE BANK
The bankers that work for the large banks usually have very little to do with getting a loan approved. They are Salesman, and as such will tell you what you want to hear until the loan is approved or declined. Have you ever met someone that was you very best friend, your best BFF until they Viciously Stab You in the Back, and Rip out Your Lungs, while smiling and grinning all the time? That is what a large bank, commercial loan officer will do to you without as much as a whimper. They have goals to meet to obtain Bonuses or to just Keep their Job. You are a piece of meat for the slaughter, a chicken in the coup, with no where to run, no where to hid!
They do not approve the loan, they have Underwriters that take your information and see if it fits inside their box. the Underwriter is like a Ninja, a Spy, you will never see him or her, they are only spoke of in the third person, The Underwriter. If it fits in the box of standards then you are given the loan, but sometimes not with the exact terms that you had talked about, but you will have your loan. These Boxes, so to speak, can be expanded and contracted to suite the profits and losses of the bank. I Guarantee, you will never know what those coveted standards represent. The loan underwriters probably do not even know if a company will obtain a loan until the process is complete and the Score is computed from information he put in the Box.
The next person you will encounter is the loan processor. This is a person who only knows what legal and company rules will be followed in order for you to obtain the loan. The processor will usually not know what language is inside their Note or Guarantee but they will know what the Banks Internal rules say you have to provide or sign to get you loan money. They are usually unwavering in their quest for the information or signatures or forms, that they absolutely have to have, in order to close your loan.
THE SMALL BANK
The bankers that work for the small banks are usually the ones writing up the Loan and Financial Analysis themselves. They can usually talk to you and look over your financial statements and have a pretty good idea if you will obtain a business loan at their bank. They will almost always be straight forward in how they see the loan because they do not want to waste their time or your time working on a loan proposal that will not be approved.
The banker will usually have to show the loan proposal to someone or to some committee to get the loan approved. Most have financial analysis skills to evaluate a prospective business but not always. Usually if the banker has MBA behind his name, he has at least been trained to evaluate a company and their financial well being.
This banker will also work with a Loan Processor to Print the Loan Documents and make sure all the documents are printed and are legal. Some bankers have power over the loan processor and some are enslaved by them. Either way the banker will always close the loan and usually is prepared to answer questions about why documents are needed and what information they contain.
I have seen bankers with Small Banks actually help a person qualify for a loan that was denied by their loan committee. The banker will usually attend these meetings and will know why the loan was denied and how to rectify the situation. The opposite is true when the Loan Officer does not know exactly why the loan was denied. Most banks will say that the Collateral was not sufficient or that the Credit Score does not meet their standards. Very rarely will the Banker know exactly why the loan was denied without being part of the process of evaluating the loan. Maybe the Collateral was short by a small amount or a SBA Guarantee could have been used to shore it up. Maybe the Credit Score was off by a few points and the borrower could find a Co-Maker or change some things to raise his score.
Summary: try to look behind the Smile and the Handshake to find out if the Banker is a Salesman or a Bonafide Banker with some Credit Analysis Experience to Aid his Analysis of your Loan Situation.
Please send any questions through this Blog or to roger@rogerschlueter.com Also see my Webpage for additional contact information at www.schlueterfinancial.com