The best thing that happened at the bank today was

New customer

New customer on line. SME. A a bit short of cash at the moment. Need $6m. They have been ploughing profits back into improvements and writing those improvements off to get the tax deductions. It all makes the current financial statements look bad, but there’s a good cashflow projection showing very high profits from now on.

Opportunity

Banker thinks, “Improvements are an integral part of any expanding SME. They never end. The more profits they make the more they spend on expansion. Cash shortage is most likely because of a combination of losing money and capital expenditure. Chances are that will continue for a long time. Just ideal! How much do they want? What’s the business worth? What is their home worth? Ok. Can’t see how they would pay it out of profits. Plenty of scope before we’d have to sell them up though.”

Helping the customer

To the borrowers, “ Well, we could possibly lend you that over 15 years. Would that suit? We can always change things around if it doesn’t. We just need mortgage security and guarantees from you. Would a couple of years interest-only help?

Long-term lending

Thinks to himself,” That looks better in the Letter of Offer. They focus on the repayments in the interest-only period. Avoids any embarrassing conversations about how hard repaying the debt might be if circumstances change. If they run a tight ship they should be okay.

If they keep on spending money like they have been, they’ll be back and we can give them an overdraft from which to pay the interest.

“Done well today!”