- December 17, 2018
- Posted by: Roger Walker
- Category: Business
Forget the old idea that does you a favor by lending you money. Remember that this is one of your business lines and you are interested in having clients to be profitable.
Ask without embarrassment
It is usual, especially in ‘beginners’, to hesitate when requesting financing: ‘I do not know if they will give me money without guarantees’. But if you do not ask, they will not give it to you. Remember that there are lines of credit for SMEs, special products for micro-enterprises, guarantee companies … Do not be embarrassed when it comes to asking for a very good price, because this way you will get a reasonable good price.
If you wait to see what the bank gives you, you will not get the cheapest one. Study and analyze what others give and think that you are in the same position as the rest. Argues that although the size of your company is modest, you must lose the fear to negotiate the conditions, because accepting high costs in banking products can be interpreted as a sign of problems in the company to get financing from others, and penalize against us.
The bank will spend time analyzing the information it has about you, which is why it will assess your excessive haste in a negative way, as well as the last minute requests. You can convey a sense of lack of planning and poor financial management. Therefore, you must plan everything well in advance.
Commits minimums and negotiates higher volumes
It is one of the best negotiation weapons. Imagine that, thanks to your charges you can get 60,000 dollars, but before they arrive you have to ask the bank to advance money. Tell them you get 30,000, and when they give you the conditions for that amount, suggest how much they would give you to get double, that is, 60,000 dollars. It’s a way to offer them a bait and then, when the bank has shown their cards, you double the bet. The logical thing is that you get better conditions.
Highlight your strengths
Transmits to your bank what are the values on which you base your competitive advantage: historical trajectory, position in the market, quality of your products, ability to pay, profitability of the business …
Turn your weaknesses into opportunities for improvement
All companies have weak points and it is a mistake to try to hide them. Consider them in your favor, arbitrate improvement plans and make them known to the bank.
Gain the confidence of your interlocutor to know what products you need to sell
In them you can get a return. And let yourself be loved: the bank employee is a service salesperson with goals and negotiating margins that he must achieve.
All the information that you present must be transparent and true. In addition, the data should be clear and consistent with those you had submitted before, which will strengthen your credibility. It will score against you the systematic delay at the time of providing information, as well as the refusal to provide any specific information. You must keep a copy of the information you send to each bank, the delivery date and the manager that receives it.
Sell to the bank the favors that you ask
Periodically, the bank will tell you that it needs to launch or enhance a specific product or service, for example, to obtain visas for employees, expand its portfolio of leasing clients, etc. You can commit to inform your employees or other entrepreneurs about it. At the same time take the opportunity to propose something in return: ‘Now that you talk about visas, I think you should lower the conditions of my card charges’ or ‘when will you lower my account management fees?’, Etc. Think that the bank will not give you anything for free. Do the same when he needs something from you.
Negotiate long-term so that the promotional price lasts
It is possible that the bank, to capture you, offers you good conditions. Try not just for the first year, but in the medium and long term. So, you are also telling the bank that you want to be a loyal customer: ‘I want to be a good customer, but with good conditions’.
Everything has a limit
Although the ideal is to get the best price, when you notice that the bank is not willing to exceed a limit, do not force the conditions. There will always be possibilities for you to rectify as you prove good results over time.
Renegotiates the products that have been most efficient for the bank
Launching a new financial product involves expenses that the entity will be profitable over time and to expand its customer base. The minimum term to start being efficient is one year. After 18 months, try to renegotiate the conditions: ‘Lower the cost, because now the management and risk of the product is not so expensive for you.
Offers purchase capacity
A young company is a perfect asset client, that is, a customer in need of a product that a bank sells. Show that purchasing capacity also offer potential new clients: your employees or other entrepreneurs.
Imagine that the first weeks of each month you have money coming from the collection of your customers. While that treasury surplus sleeps in your box waiting for you to pay on date (for example, three weeks) to your suppliers, invest it. First, everything in a bank for a week. You take it out and invest it in another bank another week, and the same with the next. More than looking for a return – which you can also get – you are selling an image in front of the bank, since you have seen the three entities that at some point have money.