Lenders may be flexible when borrowers can

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That’s the advice locao bankers offer any businessperson who’s afraid of running late on Bankers are often willing to work with a customefr to lower payments on business They’ll even suspend payments altogether for a definesd period of time. But theier flexibility hinges on trust. And trust is established when a busineses client approaches the bank with full information about what kindz of problems the busineswis having, backed with full financial That includes not only a currentg income statement and balance but also a report on aging said Marlene Roberts, senior regional chief credir officer at in Portland.
“Wer need to know, what’s 30 days past due, 60 90 days, and what are you doingb to collect thoseaccounts receivable?” she said. “Sometimes that helpsd the businessowner too. A lighyt bulb goes off, and they say, ‘I’mn so busy I didn’t even know where we were.’” Full financiapl information can help the banker see other ways a business ownee might recoversome cash. A businesz could sell off inventory ata discount, or sell equipmen t that’s not needed and won’r be any time soon. But the bankerf will also expect clients to come in with a few ideas of their own about how to improvecash flow.
“We’ expect them to recognize the problem and have givehn some thought to how they believe they can workthrougyh it,” Roberts said. Banks often want to see a businesz owner’s personal financial information, in additionj to the business statements. That lets the bank determinee whether the customer can personally guaranter arenegotiated loan. Banks have more leewat than onemight think, and will use it for a good “We can rewrite loans, we can extend the term, we can skip some said David Sorenson, senior vice president of businesds banking for in Banks seldom forgive debt.
Any banker that allowz a customer to skip payments will expect the customer to eventually catch up and pay back both principal andinterest owed. Business owners should keep in mind that banks are motivatefd tohelp them, as long as they have the righ information to help them do it, said Jeff chief lending officer and co-founder of . “Thew bank does not want your collateral,” Sumpter said.
“Igt wants to work out something on thepaymre