How to rob banks and not go to
jail
Someone once asked Willy Sutton, a famous
bank robber, why he robbed banks. He replied, “Because
that’s where the money is.” Unfortunately Willy
spent most of his life in jail. This article is about how to
get the money that every small business needs.
I’m not embarrassed to tell you that
I’ve used these techniques over the years to obtain the
money I needed to finance my various business ventures —
anything from opening a men’s clothing store, to
purchasing commercial property, to buying and selling cleaning
plants.
Like most businessmen, I used to think
that banks were in the business of lending money. That’s
the appearance, but not the reality. Banks are not in the
business of lending money; they are in the
business of making money. There is a very
big difference there, and one seeking money should never lose
sight of this in dealing with banks and bankers.
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Unlike their advertising would lead you to
believe, banks are not there to help you. They’re there
to help themselves. To be perfectly frank about it, most
bankers consider small business to be a PITA. They don’t
want your business, they consider it risky and troublesome, and
they can lend that same money, in large chunks, to large
businesses, more profitably than to 50 or 100 small businesses
in small amounts.
This is reality. The only opportunity you
have to borrow money from banks as a small businessman is if
you have enough collateral to prove that you really don’t
need their money, otherwise there’s a great reluctance to
extend you credit.
If you’re just beginning your
business, forget it! In fact, if this is your first business,
you’re better off not even telling that to the banker.
Just tell him you have a job with your company. I did that for
at least the first five years that I was in business. I assure
you, these guys can more readily relate to a paycheck then they
can to free enterprise.
Obviously, something other than simply
presenting yourself to a banker, with a pocket full of
financial statements and a loan application, is going to be
necessary if you are going to have access to their vault.
I was fortunate enough to learn early in
the game that the way to get past the guards and into the vault
was to work on the loan-officer, and not the bank.
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About 20 years ago, when I was building
cleaning plants for about $75,000, I picked up the executive
loan officer of my bank in a new Cadillac. I took him to a
fancy restaurant for lunch. Then I told him that I’d be
calling on him, from time to time, to finance the franchised
plants I was building. The next day, with basically no
collateral, he offered me a $400,000 line of credit.
Unfortunately for banks, most loan
officers become envious of the very people to whom they are
charged with lending money. Dealing with large sums of money
every day, and getting a paycheck that would send a Department
of Streets worker out on strike, these guys are easily
persuaded.
The one rule you have to remember is:
Always protect the banker. If anything goes wrong, and problems
arise, you have to be the fall guy. You protect the banker
every step of the way. By doing this, he then becomes indebted
to you.
For the small business owner who
doesn’t have a ton of collateral, the easiest way to get
money from a bank is to find a susceptible banker, maybe even
offer him a piece of the deal so that he becomes eager to lend
the bank’s money without requiring you to do any more
than sign the papers.
You simply shop the banks yourself. Sit
down and talk to different loan officers. Take those out to
lunch who look like likely prospects, and keep working through
the banks until you find the individual you are looking for.
The psychology is in your favor, and by
not pushing too hard too fast, and possibly even giving the
banker a participation in the project before you hit him up for
the loan. You have the keys to vault in your hand.
This procedure outlined above can be the
best investment of time and money you will ever make.
Dennis McCrory is president of The Golomb
Group Inc., a firm that designs marketing programs for
drycleaners. Contact him at The Golomb Group Inc., 7664 Plaza
Ct., Willowbrook, IL 60527 Tele: (800) 679-5856
E-mail: dennismccrory@golombgroup.com
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