Bankers - Where Are They When You Need Them?

They're there. But especially in today's economy, the need to speak "Conversational Banker-ese" is greater than ever.

Most retailers are constantly in and out of the debt market to finance daily operations.  Having a reliable lender is vital to your success.  Recognize that your banker - the "relationship manager" - is in fact a salesperson; the actual credit decision will be made by "the loan committee". Your responsibility is to arm your banker to effectively present your request to the Loan Committee.  And that demands that you "speak their language".

Plus, consider carefully the pro's and cons of different types of financial partner you might approach. Let's start with an overview.

	Advantages	Disadvantages
Traditional Banks	Stability Array of financial services Many to choose from Competitive pricing	Lack of retail industry experience or focus Often slow to respond; impersonal Less interested in smaller transactions Generally available only to profitable companies
Private Equity Funds	Provide "hands on" value/added expertise Generally well-capitalized May provide access to industry and management expertise	Provide "hands on" value/added expertise (Yes, it's the good news/bad news thing!) Strict investment criteria Equity ownership required Required returns often 25% + Require track record of a proven concept
Asset-Based Lenders	Nontraditional transactions Fewer financial covenants Industry focused	Rigid documentation standards Higher transaction costs Onerous reporting Traditionally perceived as lending only to troubled companies