One-size-fits-all may work in some aspects of the clothing world, but that philosophy tends to bomb in the financial industry.
That's not to say there aren't some - maybe a lot - of lenders who will try to shoehorn you into basically the same solution. Unfortunately, the chances that the solution is optimal for you are minimal.
But how exactly does a good lender evaluate you, the client?
Remember, each and every business is as unique as a fingerprint or a snowflake. No two are exactly alike.
That said, it is a reasonable practice for us to group you into broad categories that help us find that ideal fit.
Anyone who's ever played poker for a night will quickly pick up on the tendencies of the other players. Some will take plenty of chances, betting big on many hands and even bluffing when they have relatively weak cards. Others will be more conservative, cutting their losses early by folding poor hands or only playing aggressively when they have a high probability of winning. And then there are the folks who are in between, showing characteristics of both of the other kinds of players.
The same is true of you -- the entrepreneurs. And when it comes to lending, a key variable is risk tolerance.
It's fool-hearted to make off-the cuff-suggestions without getting a feel for you, your needs and your line of thinking. That's why, as part of our intake process, we'll ask you to complete a questionnaire designed to assess risk tolerance. More on that in the second part of this series.
What we want to know is whether you are "risk averse," "risk neutral" or "risk flexible."
Why is that important to you and our lending process?
That assessment points us in the direction we need to explore. Of course, each lending plan is custom-designed - and often includes multiple options -- but having this basic information ultimately save time for us and, more importantly, you.
For example, there's no point if you're nervous and hesitant about your finances in suggesting you might provide additional collateral so you can obtain a more favorable financial structure. We'd already know you don't have the stomach for it.
In addition, while you may not necessarily be savvy about your lending options, we never underestimate your knowledge. We know you can smell a one-size-fits-all approach coming from a mile away.
That personal touch can never be underestimated.
How often have you read stories about a local business that succeeded for years largely by knowing and understanding its customers - than declined when it expanded and began to overlook the initial reasons for its success?
It's happened to banks, restaurants, department stores and so on.
Don't let it happen to you.
That's why we strive to give you what you want, not what we want -- your chances for success grow exponentially. That's why risk profiles are so important to us.