How Ultravox Could Help Finance Your Business

I mentioned this at a networking event a while ago to some very confused faces, but Ultravox really could help make obtaining business finance easier.

The biggest problem with commercial borrowing is that the borrower struggles to understand what is going on after they apply. They also fail to grasp that sometimes their proposal, no matter how good it is, simply isn’t one for that particular lender. And, yes you may have always used that lender but their policies do change.

If you are thinking ‘It means nothing to me’ then let me explain further.

I’ve Written Vienna

For many companies, small business especially, they do quite a bit of preparation before applying for borrowing. For many companies they prepare far too much.

Let me take you through the analogy, you will like this!

Vienna. One of the greatest songs of the 1980’s. An all time classic track, the type that doesn’t come along everyday. Play the track and you can’t help but either sing the key lines or make your own drum beat.

All well and good, but what does it have to do with raising commercial finance? Quite a bit actually and it all comes down to working with the right lender, here’s how it works.

What The Lender Wants

This is the crux of why most commercial lending application that fail, fail.

Vienna was kept off number one by Joe Dolcé’s ‘Shaddap You Face’. Whilst Vienna was without doubt a classic all time track it never made it to the top spot. Despite having a undeniably superb product, it was still beaten to the top by something completely different.

For many businesses they prepare their own Vienna when what the lender is looking for is closer to Shaddap You Face.

Too often no matter what a company was to do they would never see their lending get approved because it is simply not what the lender is looking for. Most declined applications are nothing to do with quality, nothing to do with preparation, it is simply about lender appetite.

The problem for most companies is that the lender doesn’t disclose what they really want so the applicant is taken down a path where they think an approval is coming but in reality it never was.

Matching Lender to Applicant

There is sadly, no easy answer to this one. There are so many commercial lenders out there that knowing where you fit and who is willing to lend is an unenviable task to take on alone. I can help you with this, if you ask early then I may save you a lot of time and effort.

For a business that is looking to apply then there are questions worth asking the lender at the outset, a few good questions are;

• This is what I want to do. Tell me with complete honesty, is it a proposal that falls within your criteria?
• How many proposals similar to this have you approved in the last 3 months?
• Exactly what information do you need from me to provide me with a straight answer, list down what you want me to give you

You are better off establishing what the lender wants at the very first point of contact. If it is not something for them then don’t take offence, just ask the same of another lender.

This month we had a case of a client buying a new commercial premise. It had a great tenant already there and everything stacked up. Their bank said no. It wasn’t the borrower or proposal that was wrong, it was just that the bank in question didn’t want to lend to single unit property investors. If the client had asked the above questions at the outset (or asked me first) then they could have saved themselves a lot of effort.

The moral here? Don’t write Vienna when Shaddap You Face will do nicely.

By Dave Farmer

As always, if you have any questions about this post then please get in touch. If you want to add comments then please do so above.