Chapter 24 Second and Third Letter Financing

To turn positions successfully, you must know some tricks. Daughter who is worrying about money: As the deputy general manager of the business department, you recently wrote a good plan for expanding the company's chemical department.Your market analysis is thorough, your logic is correct, and your predictions are appropriate and feasible.With such a detailed and in-depth proposal, it should be possible to obtain a loan for the expansion plan. During the period when you wrote this proposal, I also asked someone to prepare some relevant important materials.Investors value numbers the most.It is at this point that a competent accountant can make full use of his talents, that is to say, he will include the cost of production equipment, production expenses, increased fixed costs, estimated sales after expansion, future management and marketing expenses, Advertising expenses, estimated profits for the next three to five years, the loan and interest amount borrowed for this new business, the company's scheduled repayment period, etc., are converted into numbers.Only in this way can investors understand the financial aspects of our proposed investment plans.In addition, the personal data of the business owner and management personnel, the history of the company, and the organization chart of the company at the current stage should be mentioned.

I have experienced several times in the past that investors refused to raise funds for new business plans due to insufficient information. For a moment, due to lack of preparation, the project was a complete failure. I really hope that the investor refused to raise money afterwards, and I believe the other party has the same emotion, right?) An investor I know recently told me He said that there are more and more people who want to ask him for financing with empty proposals.Those people are just full of energy and energy and enthusiasm.When asking others for financing, of course, you must abide by some principles, the first of which is that the proposed business plan must be sound and feasible.In this regard, I dare say that any business plan proposed by our company today is impeccable.

Next is the issue of choosing investors.What kind of investors will agree to finance us depends on the risk of our plan.Any business venture will of course have some degree of risk.There are various sources of funds in the financial circle, and the trick to borrowing money is to choose a source of funds that suits the physique of your business. Funding sources can be broadly divided into the following three types.One is the bank.Of course, bank loans are charged interest and require repayment of the loan within a certain period of time.Banks are willing to take less risk than any other source of funds.The second is a bank called Venturecapitalist.In addition to higher interest rates, such banks usually also require some equity in the company.The third source of funding is personal loans.Zhang San, Li Si, the doctors in the town, friends, colleagues, anyone who is willing to lend money in order to earn interest belongs to this category.When borrowing from this type of person, the terms are agreed upon by both parties.When being rejected by a financial institution on the grounds of being too dangerous, the only way is to find such a person.Personal lending can be said to be the only door that those who have only ideas but no assets can knock on.However, there are also many examples of people who have collapsed miserably and cannot repay their loans.

According to my experience, the best way is to discuss with the familiar bank first.The bankers will try to support us as far as they can.The advice they make from an expert standpoint is really worth listening to.Even if we cannot fully accept our financing request, if we give enough time to review the content of our proposed plan, it is possible for the other party to ask for partial revision and agree to financing.If it is really impossible to get a loan, the bank will sometimes introduce some other investors (such as Venture｜capitalist).It is also possible to propose co-financing by a bank, Venture|capitalist or some other investors.What I want to emphasize here is that you must not be impatient when applying for a loan, and you must be mentally prepared not to be afraid of spending time.Whether it is consciously or subconsciously, it is wrong to blindly rush to find someone who is likely to agree, and force the other party to answer immediately after finding it.This often makes the other party suspicious and timid.

In addition, there is a trick: Take the example of dealing with a bank, instead of calling the clerk of the lending department who has never met before and asking for a meeting, it is better to bring the introduction card of a famous person to visit.This will allow the negotiation to proceed in a harmonious atmosphere. Recently, when I went to see a banker I knew well, the man was irritating.I asked the reason, and he said: Just now an inexplicable guest came, and it took him two hours to apply for a loan application that was impossible to accept.It is said that the guest not only listed the names of a large number of celebrities who may have only met on one side, but even said that he has deep friends with the mayor and even the prime minister.As a result, the bank still did not accept that person's request.The banker also confided to me that he was aware of the fact that the ship owned by that man sank within fifteen minutes of sailing out of port.

Playing tricks (such as giving gifts or treating guests to dinner) is the same as listing the names of celebrities, and it will never work in financing negotiations.Attempts to bribe senior officials of financial institutions will be in vain, because they follow the rules and it is impossible to bribe them.Regardless of whether the bribe works or is rejected, the result is bound to get yourself into trouble.When you are rejected, you will lose the credit you had in the past; when you succeed in bribery, you will not only cause the banker to be dismissed, but also lose your source of funds and credit.

When applying for a loan, what kind of bank should I choose?According to my opinion, the first point is that the personnel who deal with it do not change frequently.I once cut off two big banks with whom I had relationships for many years, half for this reason.Their handlers change every year, and I have to explain the business content to the new recruits once. How can I have so much free time?The other half of the reason I cut them off is that it must take eight to ten weeks for each application to be approved for financing. It's been said that things like this always happen when you're dealing with big, bureaucratic banks.I also know this, but the main reason for this is that they have to be reviewed by the manager of the loan department of the head office in a distant place when they process financing applications.Since such a bank does not authorize the branch company with the right to make financing decisions, the branch manager has no right to adjudicate the financing application with a large amount at all.The bank I'm happy with now is the exact opposite.This bank is also considered to be around twentieth in the world. However, it adopts a regional staff lifelong employment system, so there is no annual rotation of staff. For the financing application we put forward, they will definitely be in two Answer yes or no within a week, otherwise alternatives are being considered.

I have been dealing with those two big banks for twenty years, but I have never met the manager of the lending department, the manager of the branch, or the head of the lending department.The president, vice president and loan manager of the bank I'm dealing with now know my name.Why should I deal with a bureaucratic bank like that?Now when I contact the staff of this bank about financing matters, I can know on the spot which supervisor above has a positive or negative attitude towards my application.What makes me even happier is that they not only consider the profit and loss calculation of my proposal, but also take my character into consideration.

When negotiating financing matters, investors are most concerned about risk and security.Therefore, the key to successful borrowing lies in whether the proposed security or collateral makes investors feel at ease that they are sufficient to cover possible risks.When investors believe that the risk is high, the required guarantee must of course be large.The chief reason for my being able to borrow as often as I needed was that I spared no expense in giving ample security.Many entrepreneurs are not only unwilling to provide sufficient guarantees when negotiating financing matters, but even refuse to provide guarantees.In this way, how can the investor be willing to lend you money?People who can't tell the degree of credit, or have no actual performance at all, of course the other party doesn't even consider it, right?

Banks that have been with you for many years will carefully review the following points for your business plan: the purpose of the loan, the ability of the management personnel and past performance, the company's current financial situation, and the repayment of the principal in the future capacity and interest, and the extent of security provided. When a bank refuses financing, does not ask for alternatives, and does not introduce other financial institutions, you should consider it a free (best for you) advice from them. This project seems to need to be reviewed. When the bank agrees to finance and further discusses the details, let the bank staff pay for the lunch expenses that we have together on this day!Because you are already their customer.

your financial advisor Father