By Charles H. Green

I’ve used this forum to encourage you to get out there, and get out there often to meet people, make connections and become important to someone else. Why? Because people do business with people they know, and a large number of prospective borrowing clients are referred to lenders, rather than just being found or recruited.

Networking is all about building a social network of people who get to know and trust you, and when the opportunity arises, helps someone else solve a problem with a phone call to you. So it’s important and rewarding for you to methodically build that base over the course of years.

But many of you aren’t good at it, not so much because of your shyness or any lack of social graces, but rather you just don’t recognize what success means in networking. You’re looking for instant karma or the ‘peel & win’ Lotto card, and that’s rarely–very rarely–going to happen.

So here’s a few other metrics that the use of indicates you’re missing the point on being a good networker. Read them all and ask yourself, do any of these describe you?

Measure success by the number of business cards you collect? Wrong approach–it’s not how many folks you shake hands with, it’s initiating a genuine connection that leads to familiarity and trust that matters when counting noses among your network. Whoever winds up with the largest number of cards at the end of the event probably hasn’t gotten much out of meeting most of them.

Look over the shoulder of the person you’re talking to in case someone more interesting shows up? You should be focused on getting to know whoever you’ve met and get to know whether they are a worthy connection, rather than trying to stalk anyone you think might be a better find.

Try to look smarter and more competent than others so people will be drawn to you? Your smartness and value as a connection will be self apparent to anyone really engaged in the introduction to you, unless they too are poor at networking.

Assume anyone standing alone is a loser and should be avoided? Some of the most valued connections I ever made were met with me starting a conversation to someone standing alone–they appreciated my initiative and I felt that I won a prize by speaking with someone ignored for the wrong reasons.

Demonstrate your power and influence by talking in a loud voice? Try this approach and it won’t be long before you’re the one standing alone.

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By Charles H. Green

When you’re hired to develop new business loans, the presumption on the part of your employer is that you’ll find ‘good’ loans. It’s not a stretch to visualize their desire for you to walk in each week to introduce a new client that’s prescreened and reasonably qualified for the suggested loan, free of all the warts, wounds and worries that can instantly kill their interest in the deal.

The nature of business loan development has changed greatly over the years, from when highly trained loan officers (called that because they could actually make a credit decision) identified clients, analyzed their information and made a lending recommendation. Those recommendatios carried more weight then, based on the loan officer’s experience and reputation–and obvious priority to protect the bank from credit losses.

In some places today, it’s not hard to spot the transformed ‘business development officer’ whose sole job–and often training–is limited to just digging up leads. In some of these cases, the results are just as shallow. What happens? An endless stream of half-baked deals that aren’t adequately screened and quickly dismissed after a waste of everyone’s time and a lot of copy paper.

To be successful at developing loan business today–measured by the number of proposed loans that actually get funded–it’s necessary to originate good loans. These aren’t just deals that you can expend a fair amount of begging or cajoling your way into getting a reluctant approval, but rather loans that you determine fully meet the criteria laid out in your credit policy, and represent the ‘credit box’ your company is targeting.

How to find them faster?

Number 1–make sure you know the difference; Bone up on the characteristics required in the credit policy and start studying the information you gather to determine if the evidence suggests it’s really qualified.

Number 2–stop wasting time on deals that don’t appear to be heading to number 1.

If you can’t do it, trust me that your bank can find someone who can.

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By Charles H. Green

I’ve shared a lot of insight in this column with the front line over the past year about many subtle but effective tactics BDOs can use to make the best use of their time and energy to find new business. Today they get a break and I’m going to aim a suggestion at all those who supervise, direct and motivate (or not) those business developers: lending sales managers: think smarter.

Many folks rise to management because they prove themselves at accomplishing the very job they’re supposed to supervise, but no one evaluated how good of a manager they might be. Does that make sense?

Let me quickly add that many, if not most, do a great job. But based on some folks I’ve reported to over the years, some don’t. To generalize, many know what made them successful and have decided that’s it’s the cure-all to be prescribed to all others under their watch, whether that works or not. The worst example of this kind of thinking is the idea of required weekly ‘cold calls,’ the count of which are monitored and used as a metric of meeting expectations.

Mind you, I’m a believer in cold calls for some, but like every other tactic, you have to be comfortable doing it to be effective, and many folks aren’t. I’ve been in shops where the blessed ‘cold call’ count was an expected duty week in and week out. In that kind of environment, where a directive is coming from on high instead of an inspiration from within, this tactic loses much of its impact.

What’s really important to determine how well a BDO is meeting their expectations is how much business reaches the closing table.

And I’ll quickly follow that opinion to highlight the folly of hiring someone on a six month watch, the ‘produce or move on mentality.’ It’s a waste of time and in most banks I’ve worked for, didn’t provide sufficient time for the bank to even make a credit decision and organize a closing. But that’s another topic for another day.

Meanwhile, back off that outlook that ‘everybody needs to make 20 cold calls each week,’ and watch the loan closing numbers rise, as more attention is spent on what’s really important and more impactful–get the right deal to funding.

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By Charles H. Green

So you know your job pretty well, right? You can walk into a crime scene and sort out the narrative quickly with just a couple of questions, because after all, if you’ve seen it once, you’ve seen it a thousand times. The problem with that theory is that no two crimes–or commercial loans–are exactly the same.

Some commercial lenders don’t spend enough time asking questions because experience and expediency lulls them into the presumption that they know the answers just by glancing. Problem is, by skipping over one of the prime sources of information–the prospective borrower–they tend to sometimes miss critical details that could help them get the deal approved easier, or kill it altogether.

Consumer loans rely on three pieces of data: credit score, income, and debt-to-income ratio. That’s all. Commercial loans require many layers of information, all with good cause. You have to know the clear identity of the business owner(s), personally and corporately, the business plan, financial results and projected results, legal standing, geographic considerations, cost to produce and cost of provide, staff information, market, industry….etc.

Obviously in that list, and the many subtopics each item may have, are plenty of places for minutia to reside that may be pivotal to your deal. Maybe, that is if you’ll just ask for it.

Client interviews may be monotonous at times (thinking about your doctor’s checklist: aches, pains, joints, dizziness, shortness of breathe…etc.) but necessary to ferret out a clear picture of the strengths and weaknesses of your prospect. So ask questions of your prospect as if you are getting an advanced degree in them. Don’t stop at what you think the vital information is, because in the end, it all may be vital.

Getting to know more definitive information about your prospect up front will prepare you to make better decision in the preparation of an application, and doing so will win you more loan closings.

And besides, it’s your job.

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By Charles H. Green

One of the staples for developing business for most industries is to practice the age-old tactic of ‘networking.’ Over the years I’ve noticed that many lenders miss the real purpose of networking and in effect, insure that is doesn’t work for them. What’s so difficult about the act of mingling in a room of people with multiple greetings, introductions, and shallow conversation?

The essence of ‘networking’ is really about growing your network of contacts–getting to know and becoming known by an increasingly larger circle of people. As this circle continues to grow (think years, not weeks), your influence with others and their reliance as you as a resource grows. I am still in regular contact with people I met more than 30 years ago, and hear from others frequently that I’ve met long ago–but never forgotten.

Note that you did not read the words “solicit business” in that paragraph.

Networking is often confused with ‘business development.’ Many folks equate it to working a room to find a potential business prospect today and starting the sales cycle before finishing your first beer. That notion is wrong. Doing so is like looking for a four-leaf clover and means you actually pass up the introduction to many other persons who might be the sources of much more business over time.

Networking is about meeting those whom you come in contact with, and if you’re smart, you actually invest some time getting to know them and making sure they get to know you in a respectful, measured way. It’s not about getting a business lead today–although that can happen–but rather about trying to establish at least a low-level friendship that someday may lead to business referrals or other benefits.

My prescription for the best practices to navigate through a networking event:

• Be prepared with topics to discuss or experiences to share that don’t directly confront the other party with your need to expand your pipeline today;
• Watch the facial expressions and body language among others when deciding whom to approach–some folks aren’t interested in speaking to anyone, and others make the same mistakes I warned you about above;
• Look and listen for opportunities to help others with information or introductions that you can offer, which starts establishing your value to them;
• Always keep at least one hand free of snacks or drinks so you can shake hands, and maintain the decorum of an intentional business person rather than someone anxious to get to dinner;
• Look for eye contact or a nod from others as a signal to introduce yourself–and don’t start making calculations to assume how beneficial they will be to you first. Some of the best sources of business in my career came from some of the most obscure people;
• Rather than aiming to leave with 20 new business cards to add to your mail list, a better result is to walk away with two or three that you will actually call and arrange to meet again on another day.

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By Charles H. Green

In a speech by Congressman Willard Vandiver (D-MO) in 1899, he declared that “I come from a state that raises corn and cotton, cockleburs and Democrats, and frothy eloquence neither convinces nor satisfies me. I’m from Missouri, and you have got to show me.” The state’s reputation for old-fashioned skepticism is famous and in my career, seemed to infect a majority of the prospective loan clients I ever called on for business.

Lenders underestimate the role of ‘social validation’ and often ignore the need to provide some level of proof of their bank’s appeal as a service provider. While borrower’s don’t always ask for it directly, they’re looking for some form of confirmation that you and your company have, can and will deliver on the grandiose financial solutions you’re talking pretty fast about.

What do they need? Quality references or testimonials that demonstrate there’s a third party willing to endorse you. Or some kind of written confirmation as to the information you are trying to convince them to agree to, such as a detailed explanation of the use of proceeds, or better, a breakdown of all the closing costs they’ll be signing on for if they go forward.

Offering proof to validate your words, especially coming from one of their peers, and assuring them that your claims are accurate, will go a long way toward selling them on acceptance of your proposal and make it easier for the customer to come on board.

I personally guarantee it.

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By Charles H. Green

Lots of business loan developers are cracker-jack networkers, brilliant deal screeners, and prolific at gathering all the documents and details to load up a thorough loan application. So why aren’t they closing more loans? Why does the competition always seem to snag their deals right out from under them? What’s the problem?

Many times, even after the get-to-know-you-lunch, the company tour, a thorough discussion about the funding request and all the company history, the BDO fails to fully close the sales cycle by actually asking for the business.

Assuming you win the deal is a safe bet on a lot of days. Some loan prospects either shun the idea of juggling 2-3 different banks at one time or are not very appealing or visible to anyone else. But often they are being hit on by lots of finance sources seeking to provide funding for a good company, and in those cases, the prospect has the luxury of ‘being sold’ rather than given a ‘take it or leave it’ proposition.

BDOs who want to do business with a particular client at some point needs to bear down eye-to-eye and ask them for the business out loud, seeking a confirmation that the prospect agrees to go through this process in an effort to become a borrowing client. And then, the prospect must be given time to answer the query.

We all understand that a “no” or “maybe later” is also a potential answer at this juncture, but at least you will have gotten an honest answer out of the potential client. In the best case you end up with a committed prospect, and the worst case is that you can better allocate your time and efforts appropriately elsewhere.

Instead of just trying to be superior at all of the other many duties that go into a loan application, don’t overlook the importance of just getting a “Yes,” “No” or “Maybe” from the customer.

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By Charles H. Green

Around my household, we have a phrase that’s pulled out to describe everything from bad drivers to finicky consumers ahead of us in line. It uses an invented adjective, “peoply” (pronounced ‘pee-pul-ee’) to describe the frustrating way some people just are, and is interchangable to explain away a long list of complaints. Anyone causing you heartburn, they’re just being ‘peoply.’

One funny thing about clients is that they can be very ‘peoply.’ For example, just because you tell them how easy their loan is to get approved, or how fast it will close and be funded, they get all upset if it doesn’t really work out that way. What do they expect, particularly since you knew better all along?

Of course one problem is lenders who can’t complete with good service, intuitive analysis of a prospective deal, or effective relationship building, and instead resort to saying anything to win the business, like “we can fund this loan in 2 days,” knowing that it’s not true. That often blows up in their face, but worse, it rains reputation damage down on a lot of peers who don’t deserve it.

Lenders would do better to honestly try to understand the customer’s journey and think about how your engagement with them can actually help them along the way. For you, originating loans is a job, and some of you take it more seriously than others. For the small business client, getting third party funding may be the difference between making good on their own investment, or being stuck in a dead end corner of the economy for years. It’s very serious business.

So what can you do better? Spend a few minutes in every client sales process to take note of what’s happening to the client and try to understand–and respect–their side of the process. Learn what steps your customer has to go through to respond to your requests and try to recognize their pain points. Grasping how difficult it is to comply with your bank’s requirements is the first step to valuable insight into their experience–and perhaps ways to improve it.

Develop a checklist for the application process that can serve as a client road map for how things generally unfold , the potential roadblacks that can appear, and a realistic timeframe that spells out how long approving, completing due diligence, and funding the loan will actually take.

While the client may not be happy with your reality, at least you’ve established expectations that you can meet and they won’t be disappointed over. It may be one of the best experiences they’ve had in a long time.

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By Charles H. Green

Nobody’s perfect and we all have had moments in a sales situation where we either said something we wished later we hadn’t, or didn’t say what needed to be said, both of which could have turned the tide into a more successful outcome. But since we don’t live life looking back, we learn those lessons and move on to another day to try again.

These pages have chronicled many ‘to-do’s’ and ‘not to do’s’ but this week I’m going to jump the track and describe what I believe is the absolute worst mistake anyone can make in the sales cycle with a prospective buyer.

That pronouncement automatically puts me out there in a defensive posture, since there are plenty of things that can go wrong. Given the right circumstances, there are a number of interchangeable mistakes that can sink a prospective deal, any one of which might feel like the worst, given how the process goes with a particular prospect.

But I believe one mistake stands head and shoulders above all as the worst. And I’ll acknowledge here and now that lots of folks make this mistake, yet still win deals, despite the fact they’ve clearly been lucky or are dealing an unconcerned or impatient prospect.

The mistake? Failing to present a clear value proposition.

Let’s face it: all money is green. In the eye of the buying public, bank one equals bank two. Your company spends a lot of money trying to distinguish itself in the marketplace that’s already full of “friendly, hometown, community bank folks,” et al but the most successful banks are obviously doing a much better job of it.

But distinguishing the company is not enough. Every lender must also be able to articulate clearly and succinctly exactly why the lending prospect should be borrowing your company’s funds, and not the competition’s. What’s makes doing business with you decidedly better than that other Bozo calling on the same client? How can you get the job done visibly better?

If you can’t quickly create a clear picture of the enormous value of getting the deal down with you in the eyes of your prospect, let’s hope that your competition is soft. Finishing second is not very rewarding and will quickly get old.

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By Charles H. Green

We all know there are many crazy situations with people that have to be managed during the process of originating business loans. One of my frequent vexations over the years when so frustrated, was to exclaim “what a great business commercial lending would be, if you just didn’t have to deal with clients.” Obviously, that’s a futile and pointless gripe, but all too true on many days.

Problems–specifically client problems–are part of the deal. Some of the people who approach you are dishonest, insincere, misrepresenting something, devious, forgetful, ignorant, inattentive or otherwise can be just a pain in the @ss. As much as we want to do deals and want to help people, we also want to make the best use of our limited time.

The best way to deal with these kind of folks varies as widely as the many different kinds of problems with the people that you will encounter. But in my experience, I’ve found these six rules are useful at least as a starting point for you to confront the problem (i.e. the client) head on, and let the chips fall where they may.

Lay down the ground rules – One of the best ways to stay on the right path to success is through nice, but specific, communication from you in your first conversation with the clients about the mutual expectations of your engagement. They may want and qualify for a loan, and there may be several competitors within reach, but you are there and ready to go. Your engagement comes with expectations of their sincerity, candor, and responsiveness if you are to be able to succeed. Spell that out to up front.

Get communications in sync – You can’t be glib or abbreviated about what you need, and they need to know that you expect to only ask for something once. If you have to beg for information that helps them get a deal done, you might as well get your four year-old to handle the deal (they’d be on the same maturity level). If the client doesn’t respond in a meaningful way, give them a verbal warning once, and then move on.

Confront the lie (intentional or otherwise) – We’ve all had someone verbally represent something that we easily discovered was false, incomplete or misleading. Don’t let that go unnoticed or addressed. Let them know that you can’t do your job if they don’t provide you with good information that reflects the truth. If it happens again, fire them.

Offer to resign – Maybe you become aware of the impatience the client has with you–sometimes two people just don’t jell, and there’s really no one to blame. Recognize that impasse, if it exists, and visualize how it might affect the success of the deal. If you think it will be hard to win loan approval due to the conflicting personalities, offer to resign and refer them elsewhere.

Challenge the competition – One of the really irritating situations I recall is having someone with a truly weak deal always reminding me every ten minutes that there are plenty of other banks “who would love to do this deal.”  Regardless of the strength or weakness of the deal, I didn’t let anyone get away with that kind of pressure or negotiation. Let them know that they are free to take up this conversation with someone else at anytime, and you’ll move on to the next client.

Fire the client – I’ve offered this suggestion before, but to summarize, if you have a combative client that won’t get you the information you need, won’t respond to your calls, criticizes what you do–based on what you know–or tries to obfuscate their information, fire them. They’re not worth your time or risk to your reputation.

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