Interview your banker – Part two
Hands down, best business meeting ever. I spent an hour with the commercial lending manager at my financial institution. I was very impressed with the level of preparation made on my account (pun intended). A thorough overview of my business and personal finances was undertaken and I learned a great deal.
The most important of which is, that somewhat like Jeopardy, the answer is always in the question. Three years ago when I asked for an operating line of credit for my business (and left with a new mortgage instead), I should have asked how to get a line of credit. Not wether or not I could have one.
Debt isn’t something that happens to us, like chicken pox or a cold, it’s something we let happen. I let it happen. Three years ago, I made a big mistake and I see it more clearly now. But today, I learned what a realistic expectation for a line of credit is, the range of the ratios (debt equity, working capital, debt financing ratio) to aim for, that the work you do lines up with the work that is done on your behalf by your lenders and accountants so that the effort you put into your business or personal wealth is an accurate reflection of your reality and your dreams. I only wish I’d had this meeting three years ago.
Fourteen years ago we had negative net worth. We started a business from nothing. Today, we have positive net worth and a business that provides for our livelyhood and that of the people who work with us. That’s not nothing. Every day I’m in the office, I walk up these stairs and it reminds me. We built this and we’ll keep building it one lesson at a time.