The Budd Schulberg Factor
This could be why so many businesses still apply to their bank for commercial finance as the first port of call then rarely look for an alternative afterwards.
Let me tell you who Budd Schulberg was. Budd was an American TV Producer, Screenwriter and Sports Writer. It is in his capacity as a sports writer that I became aware of him.
The Budd Schulberg factor was something that came about after a famous boxing match back in 1987. Marvin Hagler was fighting Sugar Ray Leonard. Leonard had fought just once in five years, was stepping up in weight and really should have been out of his depth. Hagler was undefeated in seven years and was making the 13th defence of his world title.
Leonard won the fight on points in a match where the decision has long been argued about. It was Budd Shculberg’s writing after the fight that bought about the Budd Schulberg factor, it goes like this;
People were so amazed to find Leonard capable of much more than they imagined that they persuaded themselves he was doing far more than he actually was.
You have to read it a couple of times and you start to understand it’s impact.
You could draw comparisons to products like Apple. They do something that a rival doesn’t and you therefore think everything is so much better, yet under the skin the parts are almost the same as any other brand. It does work in today’s world.
The Budd Schulberg Factor in Finance
You can start to see how this factor crosses over into finance. The big banks advertise small things, HSBC promote the use of voice recognition at the moment. Barclays offer digital services. Both things that you may not expect from a traditional company. So are they playing to the Budd Schulberg factor?
When it comes to commercial lending there are loads of lenders out there doing things differently. Offering very good rates, great service and quick turnaround times yet so many companies still go to the traditional lenders regardless of whether that is the best option or not. Sometimes they are, it just isn’t always the case.
Where the factor really comes into play in the lending process is when it is applied not from the perspective of the borrower but from the perspective of the lender. If you can use the Budd Schulberg Factor to your advantage then you can paper over weaknesses in your proposal via the perception of strength elsewhere. If you want more details then let me know.
By Dave Farmer
Lime Consultancy are a commercial finance broker. For any comments about this post please add them or get in touch via the form below.
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