Commercial Bankers – Commercial Lenders, Listen Up!

Commercial Bankers – Commercial Lenders – Listen Up!*
Under Performing Commercial Loan Sales Territories?**
Establishing a new Loan Production Office (LPO)?

On-Site territory rehabilitation services are now available to commercial lenders nationally through the services of The Easton Group, LLC (the “Provider”).  These professional services are designed for those lenders experiencing a serious lack of loan production within existing sales and marketing regions / territories.  The Easton Group, LLC also has expanded its professional coverage into the planning and establishment of new Loan Production Offices (LPO).

On Site – On Time – On Target – On Budget

While talent to address and possibly correct deteriorating situations may exist within your organization, managers rarely have the flexibilities to spend an extended period of time within a single sales territory. Utilization of the Provider ensures an independent, experienced and focused engagement. The Provider seeks to achieve positive results within 30 days of concluding their implementation phase.

Professional fee options include hourly, per diem or negotiated project pricing + OOP expenses.

View additional detail about these new programs, as well as other secured party services, at www.TheEastonGroupLLC.com .

* You may hear Mr. Easton (principal) speak on these topics through Webinars hosted by the Commercial Finance Association.  His first of three scheduled presentations is on December 13, 2011.

** Request your free detailed service overview of the “Rehabilitation of Under Performing Territories for the Commercial Lender” and the “Establishment of DeNovo Loan Production Offices”.  This detailed information is available by calling Ken Easton of The Easton Group LLC directly at 603.533.1935 or by requesting via e-mail at eastongroupllc@comcast.net .

Yes – You DO need to AGAIN read the documents at Loan Closing! by Ken Easton

Getting ready to close a business loan – $50,000, $250,000 or maybe in the millions?  So you signed the lender’s Commitment Letter – your next step is to go to the loan closing, sign their agreements and put to use your new funds – Right?  Not so fast – you’re really not there yet.

Following your signing of the Commitment Letter the lender usually has a few days, or more realistically a week or two, to develop their loan agreements. 

Loan documentation, when briefly reviewed at the loan closing, may seem more daunting than the few pages of the Commitment Letter.  You may then be told “Don’t be concerned at all of the additional verbiage – it’s only the lender’s traditional ‘boiler plate’ – routine to any deal”.

Even if you did review the loan documents a few days before – do it AGAIN at the closing. It may take another hour (lunch may be late) but better that than discovering too late that certain overlooked promises (or agreed upon covenants) are missing. OK to correct with a quick side-letter? That’s up to your attorney.

Do you feel that inasmuch as the lender’s attorney is present that you don’t need to be represented? Try to save a few bucks and you’ll regret it later.  The lender’s attorney is paid to look after the best interests of the lender – not yours – so what will you do right?

• Compare the Terms & Conditions (“T&C”) of the lender’s Proposal Letter you accepted to the Commitment Letter.
• Insist on receiving copies of the loan documents before the loan closing – 3-4 days before so you and your legal counsel can review it all considerations – including the boilerplate!
• Compare the Commitment Letter’s T&C to the loan documentation specifics. 
• Don’t make verbal payment commitments to vendors or others that payment will occur on the day of the closing.  If the closing is delayed (by you or the lender) where is your creditability?
• At the loan closing – one more time – you and your attorney will go over agreements ensuring compatibility with all understandings.
• You will be represented by legal counsel at the closing.
• Not unusual for a lender to request at the loan closing additional collateral, guarantees and the like. His additional documents will be ready. If you are uncomfortable with such events – delay.  You have leverage too – that is if the lender wants your borrowing relationship.
• Your leverage – you’re prepared to “walk” – or at leave the conference room – until you are satisfied with the lender’s modified position – and make sure it’s documented before signing agreements.

Most lenders use all caution and reasonableness when structuring loan agreements – and they may be surprised when something was found to be left out. They want it right too!

And what about the lender’s Proposal Letter – well that’s another story and your opportunity. Register for my Webinar at the Commercial Finance Association on February 21, 2012.

Commercial Lender’s Sales Training

Commercial Lender’s Sales Training

I’ve never been one for utilizing a Blog for anything other than sharing information.  However, a bit of promotion, in the right place, can supplement a subject and be helpful at the same time.  So a bit of information – and promotion – this time.

Why is it that competing financial institutions gather together for area-wide functions; legal and economic panels, financial seminars and common industry issues but there is no commonality or “community” offerings for the specialized sales and marketing techniques vital to the selling and marketing of commercial loans?

It is simply because the proprietary and confidential issues regarding internal commercial loan processes, policies and techniques are unique to each institution – not to be disseminated within the larger lending (and competitive) community. It is evident, of course, that such lender sales training and instruction should be strictly internal.

An internal workshop has now been exclusively developed for commercial lenders by The Easton Group LLC:

“The Commercial Lending Sales & Marketing Workshop”

Application of presented techniques will be vital to achieving budgeted growth and enabling the continued development of a profitable, stable and risk diversified commercial portfolio. Techniques learned within the workshop will also be vital to the retaining of existing business, the opening of new markets and the rehabilitation of non-performing territories. This workshop also enables a huge reduction in the learning curve of new business loan representatives.

In reality, many new business representatives are well seasoned – following years on the job. At the other end of the spectrum, representatives in training are developed from other bank disciplines such as credit or branch positions. There is usually a wide knowledge gap between seasoned representatives and representatives in training. Without a structured internal training program there exists a huge learning curve which, in some cases, may take years to resolve. In most cases lending institutions do not have the time (or available staff) to develop a comprehensive internal sales training program for their “revolving” sales staff and others with commercial lending responsibilities.

You are invited to view a copy of the workshop’s Agenda at The Easton Group LLC  (Workshops). You may also call Ken Easton direct at 603.533.1935 requesting a hard copy agenda and a sponsor’s materials package. Participants “take away” materials may include an all-inclusive workbook and supplemental reference materials. Workshops may further be tailored to a lender’s specific objectives and/or include host speakers.

Your presenter will be Ken Easton – a 35+ year veteran of our commercial lending community.  He has served in positions as a line lender, staff management, and the sales and marketing officer for major commercial lending institutions. A professional profile is available within the website.

Attendance is recommended between 12 (minimum) and 24 participants. The cost of the full-day, internally presented workshop is $230.00 per participant. Maximize your value – attendees may represent your new business development staff, commercial lending officers, as well as select credit and branch management personnel.

Open 2011-2012 booking dates are available commencing June 2011. Special considerations regarding client timing and venue considerations may be addressed by The Easton Group LLC.

Credit Unions for Business Financing? You got That Right!

When seeking business loans, whether for working capital, asset purchases or growth, business owners are, in many instances, missing the boat. As in a shoe store “one size does not fit all”- that is commercial banks or credit unions – but at least walk into the store.

What looks like a bank, has deposits and CD’s (and depositors’ insurance) like a bank, shareholders (members) like a bank, makes loans like a bank, is staffed in most instances with former bankers, and rates and fees (my opinion) traditionally lower than banks – America’s credit unions. Credit unions are governed by the National Credit Union Administration (NCUA). 

It is usually the larger of credit unions have dedicated commercial loan departments.  Credit union business lending officers, and their analytical credit supports, are as seasoned as their counterparts in banking. Credit unions are frequently more competitive related to loan interest rates, loan approval times, collateral advance rates, and they exhibit the flexibilities to accommodate loan structures best suited to particular situations.

Business borrowers will be required to become a “member” of the credit union and maintain at least one deposit account.  This is not really any hurdle as “fields of membership” are flexible; seldom limited to any one company, industry, community, etc.  Members actually own the credit union. Frequently the new business borrower becomes a member commencing at the loan closing (a minimal fee – I paid $5.00).

To locate credit unions in your locality click here.  Not all credit unions listed will have business lending capabilities – the larger ones will. Should a credit union’s lending limit be lower than what a borrower seeks, credit unions may participate with one another to achieve requirements – each makes their own credit decisions. For more information web  search credit unions.

SCORE – A “White Knight” of Small Business Solutions by Ken Easton, The Easton Group LLC

As a tender sprout may or may not survive the harshest conditions of its environment without the farmer’s care, so too the start-up or struggling small business may survive or die in the storms of the business world. Odds are it will die without experienced counsel.

I work in the trenches of business finance; short-term counseling as well as temporary CFO assignments. As such, my services are fee-based, providing high value and healthy returns on my clients’ investments. However, if a potential small business client is contemplating a new business, is currently a start-up or its sales are under $3MM (my measure), do the client and yourself a huge favor. Consider SCORE business counseling.

First of all, it’s free! The duration of their services can be one day, one month or even a year or more. At the critical stages of small business formation and development, SCORE can assist in the preparation of a new or updated Business Plan – certainly valuable to you as the possible future consultant. This will also preserve a client’s working capital (fees) at this early stage.

“SCORE” stands for Service Corps of Retired Executives. Its tag line is Counselors to America’s Small Business. With 350 offices nationally, SCORE has 13,000 volunteer mentors possessing more than 600 business skills. Again, counseling is free! They also offer many local workshops minimally priced from $25 to $40 for a two to three hour program.

SCORE counseling and workshops cover a multitude of basic business topics:
- Starting Your Own Business
- Business Formation
- The Simplified Business Plan
- 9 Steps to a Better Website
- Taxes for Small Business
- Internet Marketing, Marketing & Sales
The list goes on.

While I am a SCORE volunteer counselor, my full-time profession is fee-based business finance counseling. I’m keenly aware of expense and cash-flow challenges small businesses face, especially in start-up phase. Therefore, I often recommend SCORE to those who are new to business. SCORE can be a material benefit to your potential or current client. That means value to you and your business in the long run.

To learn more about SCORE, or to contact your local Chapter, visit www.score.org.

Ken Easton brings his many years of comprehensive and successful business finance, lending and consulting expertise to his business clients, audiences, readers, and workshop participants.  Ken is the author of “$urviving Your Business Debt” and his monthly periodical “Biz Finance Tips”, available at www.survivingyourbusinessdebt.com.  For further information, visit www.TheEastonGroupLLC.com

Financial Forecasts –For Real? by Ken Easton

Here we go again – it’s about time to prepare the business’s 2011 financial forecasts for your annual reports, internal use, lenders, and the list does go on. We know that most everyone does try to get this as reasonably accurate as possible.  In today’s economy “blue skying” just doesn’t work.

However, the preparer is not infallible and the best laid plans will go astray but do not be burned by unforeseen events (economic or otherwise) – whether locally or globally.  On your forecast cover page (or even on each page) consider inserting the caveat “Forecasts are subject to a 5% – 15% variance due to conditions beyond our control”. Percentages shown are only samples – you put in what you feel is reasonable.

Consider the placement of such language after discussion with your accountant.  Of course, some prepare three types of forecasts: best case, most likely case and worst case.  Assumptions should always be present as to how the numbers were achieved.

Remember that forecasts are not commitments but are rather reasonable estimates based upon the world as we now know it. OK – Go to it!
Kenneth “Ken” Easton brings to his business clients, readers of his book “$urviving Your Business Debt” and subscribers to his free monthly newsletter “Biz Financing Tips”, audiences and workshop participants, his many years of comprehensive “in the trenches” successful business finance/lending/consulting expertise.   Ken’s mantra may best be described as “Being both forewarned and forearmed businesses can employ courses of actions which may save their business, their fortunes and their peace of mind.”   To learn more about Ken and his offerings to business borrowers, lenders, accountants, attorneys and consultants log onto www.TheEastonGroupLLC.com and www.SurvivingYourBusinessDebt.com.  Ken’ says regarding his free monthly “Tips” newsletter: “The tip you miss may be the tip you need”.

Document Those “Special” Arrangements You’ve Made with Your Lender

“Look, I know it’s not in the Loan Agreements, but trust me, it’s a deal between us. I won’t let you down”. As a business professional you feel you can safely take you lender’s word that side comments will be honored. Wrong Move!  While all intentions may be the best, at that time, the realities of life will impact such special and verbal arrangements – and, of course, at the worst time.  It’s OK to trust your lender – but does his trust in you preclude his institution’s loan agreement? Of course not!  Your lender may be transferred to another group, leave his bank, may move away or may die.  Sorry – no one’s there to verify such special arrangements.

Easy Fix! Through the use of written and executed “Side Agreements” – usually developed by your attorney and (usually after some negotiations) executed by the Lender – any important “understandings” are now cast in stone.  Such Side Agreements then become an important part of the overall loan agreements.  Side Agreements are hard evidence of additional, and enforceable, agreements made outside of the basic loan closing documents.  For example, under what conditions will loan covenants be modified, will improved business performance trigger some flexibilities as regards salary limitations on owners and officers, what about limitations on capital purchases, under what circumstances will modifications to collateral advances or collateral eligibilities be considered?  Future modifications of Loans to Officers are frequently addressed within such Side Agreements. The loan officer said he would release your personal guarantee - when?  Get it in writing – always!

Kenneth “Ken” Easton brings to his business clients, readers of his book “$urviving Your Business Debt” and subscribers to his free monthly newsletter “Biz Financing Tips”, audiences and workshop participants, his many years of comprehensive “in the trenches” successful business finance/lending/consulting expertise.   Ken’s mantra may best be described as “Being both forewarned and forearmed businesses can employ courses of actions which may save their business, their fortunes and their peace of mind.”   To learn more about Ken and his offerings to business borrowers, lenders, accountants, attorneys and consultants log onto www.TheEastonGroupLLC.com and www.SurvivingYourBusinessDebt.com.  Ken’ says regarding his free monthly “Tips” newsletter: “The tip you miss may be the tip you need”.