Wow! My Client was irate, possibly just plain hurt, by the negative commentary. As you know, the years of 2015-2018 were tough years for profitability in the dairy industry and some other agricultural sectors as well… He had met with his loan officer, and despite being profitable in both 2019 & 2020, this is the message he caught: “You are a problem loan!”
What? Problem loan customers don’t show profits for two years in a row, reduce their Accounts Payable by over $200,000 and also service their debt structure as agreed. Oh, and did I mention that the Client’s Loan to Value was 60% on his herd loan and 80% on his feed line, along with an excellent diversification plan in place?
The point is this. If we had been playing football, the loan officer would have been flagged for unnecessary roughness! I understand that being a loan officer is not an easy task, but being one also doesn’t give him or her a license to be a butt-head either… The job isn’t that difficult. I know, because I did it successfully for eight years. My message for this loan officer is one that comes from former President Teddy Roosevelt, who said:
“Complaining about a problem without proposing a solution is called whining.”
Now, more significantly, what can you do, as a borrower, to avoid being the recipient of such “unnecessary roughness?” I’d suggest the following items, which this borrower had already put in place:
- Monthly tracking & reporting of Inventories & Accounts Payable.
- Monthly Cash Flow Analysis of your operations. Remember, if you measure it, you can understand it. If you can understand it, you can control it, and if you can control it, you definitely can improve it!
- Regular CPA Prepared Financial Statements, at least 2X per year.
- Positive goals that seek to boost profits long term.
- A Diversification Plan in place to survive the downturns.
- A Plan that includes opportunities to evaluate, adjust course and implement the process.
Following these steps doesn’t guarantee that you won’t become a target of “Unnecessary Roughness,” but I assure you it will prepare you for greater levels of success and the ability to stave off any success comments.
I urge you to please join me in making the changes we need to in order to succeed and prosper! As we move forward with my Next Level Thinking™ blogs, I’ll start my focus on the benefits of “Upstream” thinking from Author Dan Heath. If I can assist you in any way prior to that, please reach out at firstname.lastname@example.org or at 209-988-8960.
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