FOR THE MEMORIES
I needed money for one of my businesses. I didn’t
want to give up any equity to investors, and everyone in my family was
still in good health, so I ruled out inheritances. I had no choice---I
called my banker.
We had a lovely conversation. We talked about her
job, our families, past and future vacations, her new boss and other
intimate subjects. This was indeed personal banking as it was meant to be.
Then I told her I needed a loan.
Her voice lost all charm. "But I thought you
just told me how well you were doing."
"We are doing well," I answered, a bit
too defensively. "It’s just that one of the companies is
experiencing a slight cash flow problem due to start-up costs, and we’d
also like to increase its inventory. Nothing serious."
There was a long silence while she remembered she
was a "personal" banker. Perhaps she realized she made me feel
like worthless scum begging for a favor from a former friend.
Finally, she sighed heavily and ordered me to get
a pen so she could recite a list of documents she would need if she was to
review the request for the money I wanted to extort from her. When she
finished, I thanked her profusely for considering my pitiful needs and
promised to have the documents to her by the end of the week, provided I
could find a large enough truck to deliver them.
I told the story to a friend at lunch, and he
suggested I try the Small Business Administration
"The SBA!" I cried, horrified. "I’d
need to contract with Southern Pacific to get them all the paperwork they
"No, no," my friend said. "They’ve
simplified everything over the past few years. Now they go directly
through banks that specialize in SBA loans, and it’s very simple."
I was skeptical, but he convinced me to give it a
try. I called the bank he referred me to and told my new banker friend,
Todd, my life story. I then told him how much money I needed and why, and
he was encouraging.
"We’re here to help the small business
industry," Todd said. "We’ve streamlined the process, and with
the federal government (through the Small Business Administration)
guaranteeing 90 percent of the loan, our risk is greatly reduced."
I was getting excited. Interest rates weren’t any
better than conventional loans, but the term was longer---seven years as
opposed to five. And this guy sounded like he was actually anxious to lend
me money. What a change from the Dragon Lady.
"Oh, one other thing," Todd said.
"Sure, anything," I slobbered into the
"What are you going to put up for
"I beg your pardon?"
"You know, collateral. What real estate can
you put up to secure the loan? If you don’t have any commercial
property, we can probably swing it with a second on your home."
There was an extended silence. I was waiting for
him to tell me he was kidding. He was waiting for me to decide which of my
hundreds of skyscraper office buildings I would sacrifice to him to secure
my piddling little loan.
Sadly realizing he was serious, I broke the impasse.
"Just a quick question, and maybe it sounds dumb,
but is it the federal government’s intention to only help small business
owners who are wealthy enough to not really need special help?"
"Absolutely not," Todd said indignantly.
"We will do an unsecured loan as well. But it’s much, much more
difficult to get it approved."
"Like in impossible."
"I wouldn’t say that. But neither this bank nor
the federal government has any interest in making a loan that can’t be
collected if the business fails."
My friend was right. The SBA process had become
much simpler. They can basically tell you "No" right over the
phone now without any unnecessary paperwok. Quite an improvement.
I went scrambling back to my personal banker.
After three lunches, innumerable pleasantries, continual dissemination of
statements and projections and a pathetic amount of begging, I got my loan
the conventional way---I earned it.
And I rest easy now, knowing that when I own my
first office tower free and clear, the SBA will be there to help.