Q: Banks aren’t lending. Where do I go for growth money?
Kansas City, Missouri
A: In the current economic freefall we’ve been destined to play out due to very bad decisions made by ‘too big to fail institutions,’ you are suffering. When all else failed, I borrowed from friends, family, my distributors and even secret fraternal organizations. The groveling is painful, and if you are late on a payment you risk a relationship. I have not heard any positive outcomes from getting credit card advances. The writing is on the wall. There is very little to no investment money available currently. I’m not sure if we’ll ever return to the days when your bank just automatically issued big lines of credit to their best business customers.
If you are currently profitable and can prove it, it may be time to consider franchising. That’s how the last wave of foodservice giants was born. If you are marginally profitable, I would advise you to stand pat, do nothing but save for the future. Live lean and mean. When this financial fiasco finally breaks loose, you will be a survivor. You will have your own saved money to finance your growth. No more humble pie trips to loan officers. I truly believe that you need to, in the words of Harvey Mackay, “Dig your well before it runs dry.” This means that between today and the future get to really know a lender. Purchase bank stock, get invited to meetings. People lend to people they trust, period. If they don’t know your character, ability to repay and creditworthiness, they won’t get excited about standing up for you to the loan committee. If they believe in you, they will go to bat for you. You haven’t cultivated those deep trusting relationships yet. Use this time to ‘get to know your banker’ investor. Good luck.
Big Dave Ostrander owned a highly successful independent pizzeria before becoming a consultant, speaker and internationally sought-after trainer. monthly contributor to Pizza Today.