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| How it all started Story behind Loan Financing Guide for Small Business Owners |
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| Copyright © 2005-2008. D. Neil Berdiev. All rights reserved. |
Before Loan Financing Guide
A few years into my lending career I began to get bored with the
mundane routine of looking at one small business loan request after
another while being hundreds of miles away from my applicants. I
did not see the final results of my work, did not feel a sense of
accomplishment, and did not believe that my work had value.
Furthermore, I did not have an opportunity to communicate with
my borrowers and help them become more financially savvy. My
job was to help in the approval or rejection of loan requests, no
questions asked.
I felt under-utilized and restless at work, and I began to consider
changing industries. When I was almost ready to leave the world of
commercial lending, I started to think about what I could do in my
current position to satisfy my needs as well as those of my
customers. After many different ideas, some of them so ridiculous
that I will not mention here, I was intrigued by the idea of
becoming a small business owner – just like my customers. An
entire year or more was spent exploring a number of business
concepts and researching the market about them, but nothing
seemed to be the right fit for me.
I met several trainers whose lending careers took them into the
field of professional education. They were teaching classes for
lenders, and their work took them all across the US offering
training that helped people succeed in their jobs. I cannot recall the
exact details, but one day I had an “enlightenment” – why can’t I
use my professional knowledge and begin helping small business
owners? Of course, at that time it seemed like a strange career
path. It was almost doing things backwards. I shared my idea with
a few co-workers. While no one said anything negative directly, I
felt that I was getting strange looks. One colleague did tell me that
I did not seem to have focus on my work, and this was the main
reason for my “soul searching”. He went to say that some of my
ideas were equivalent to non-profit work and there were enough
non-profits providing training to small businesses. At the end of the
day, I did not meet a single person in my industry who thought this
was a promising idea. Well, looking back on my first steps I have
learned one thing – let people do the talking, and I will do the
walking. The worst thing one can do is to give up even if no one
supports his or her efforts and ideas.
Defining small business…
Before I continue with my story, let me try to define the phrase
small business. Some describe a small business by the number of
employees in a company, while others by the size of a business’
annual revenue. Large lenders, such as Bank of America or
Citizens Bank have one definition, while smaller commercial banks
such as Cambridge Trust or Wainwright Bank have another.
Nonetheless, we all tend to agree that the characteristics of a small
business is revenue between $0 and $10 or even $15 million, and
a business that has from 0 to about 100 employees. As for small
business loans, they are commonly defined as loans from
$100,000 to probably $3 or even $5 million; this threshold is
constantly being raised by lenders. Loans under $100,000 are now
affectionately referred to as micro loans.
The beginning
The more I thought about training small business owners, the more
I began to notice that many small business loan requests either did
not have a chance of getting approved or small business
entrepreneurs applying for loans were making the same,
unnecessary mistakes. I worked with many entrepreneurs; from
start-up go-getters trying to launch their first ventures to incredibly
wealthy small business owners whose companies could be called,
for lack of a better expression, “cash cows” (businesses that
generate very strong cash flow). My conclusion was the same –
many businessmen and businesswomen did not seem to have the
knowledge of fundamentals, let alone more complex things about
securing loans on the best possible terms and successfully repaying
them.
What do lenders expect? What are they looking for? How can I
prepare my loan request the right way in the least amount of time?
What are lenders’ pet peeves? What kind of behavior do they
appreciate and even reward? These are some of the key questions
a small business owner would want answered. Another benefit of
such knowledge is that it will help you be successful throughout
your small business ownership career. As I look back on my
experiences, I begin to understand the reason for the lack of small
business education and training when it comes to loan financing.
Lenders are not educators and coaches. They are lenders, and this
is what they do best. They do not have the time to explain the
basics and even more advanced topics. The incredible competition
among commercial lenders has led to almost a conveyor-like
approach to small business loan review and approval.
So, I decided to fill in the educational gap. It seemed to be a
perfect fit for me. I will bridge the knowledge and communication
gap between lenders and small business owners and find ways for
each group to understand the others’ needs. As overly-ambitious
as it may sound, I did not see any reason why I could not do it.
Perhaps the scale of my endeavour is what made it particularly
exciting for me. Of course, I may fall miserably short of being an
Amerigo Vespucci discovering America, but I can at least try to
create something unique that will make a difference in people’s
lives.
One step at a time
Now that I had a vague idea of what I wanted to do, the next
question was how to achieve my goal. Without a clear path in
mind, I began writing articles that covered issues that I though
small business owners needed to be educated on. By the time I
was done with my third article, it occurred to me that I could write
a book that will be a manual for small business owners, both
beginners and experienced ones. I became infected by the book
writing bug, just like millions of people in this country. As if there is
not enough competition in the publishing world, here comes a
banker trying to make his voice heard.
I quickly moved past the initial excitement of feeling almost like a
genius (mind you I will never qualify). I had a pretty tough task
ahead of me - writing my very first book outline and table of
contents. The main challenge was to create a format that would be
easy to read. The only way I could develop a successful table of
contents is by creating a road map. After struggling for a couple of
months, my table of contents ballooned into a 3 page essay. At
that point I decided to scrap my efforts, practically delete
everything, and start all over.
The second try focused on laying out a path that would mirror the
process a small business owner goes through in applying for a loan.
This meant that every business owner first needs to realize that he
or she needs a loan, try to figure out how much money is needed,
apply and secure a loan, and then make sure that the loan is
repaid. I wanted to equip the small business owner with the
knowledge he or she needs along the way to make the loan
financing journey more successful and manageable. My goal was
not to look at competing books’ tables of contents but to create
something that will be unique and most importantly effective for
people of various experiences and various levels of familiarity with
the world of finance. Now that I finally had a table of contents,
things got a lot easier, or so I thought. In reality, this was not even
the beginning. Now it was the “dark period”, writing page by page
something I would some day call a draft.
I think every sizeable undertaking goes through periods of ups and
downs. The creation of a draft was one of those moments in my
life when I was truly involved in something and at times felt like my
Loan Financing Guide was my whole life. The learning curve was
incredibly steep. Trying to establish my writing style and also trying
to stay focused on my audience and my topic was anything but an
easy task. As a result, my work was a periodic avalanche of
checks and balances to ensure that I stayed on track.
Writing was also extremely challenging because during the day I
was a commercial banker. The only time available for writing the
book was evenings and weekends, which meant that for a period
of about 2 years I had to juggle my job, my book, and my
personal life. One moment I was enwrapped in a sense of elation
and the next moment I was completely exhausted and
overextended with the amount of work. Twenty four hours in a day
seemed like a very short period of time, particularly since sleep is
required. The moment I finally put the last period in my manuscript,
it was time to celebrate.
The rise of Loan Financing Guide
After the manuscript was completed, I began the challenging task
of editing the book and going through the steps of publishing it.
Throughout this process I discovered how tough and competitive
book publishing is. I had to find the right people to help me with
the book design, production, printing, and distribution. Some of
them were excellent and made my work a lot easier, while others
made my project a nightmare.
Despite all the obstacles, the day came and a printed copy of my
book arrived in the mail. I was truly speechless (although I did not
admit it to anyone at that time). One thing is to write and constantly
think about the book you are creating, it is another thing to actually
hold it in your hands. I cannot describe the feeling in words, as I
will be doing a disservice to that moment. Looking back at the
entire process, I realize that I have overcome everything thanks to
focusing on the small business owners whom my book will help to
get their businesses a step closer to becoming financial successes.
Needless to say, the daily support my wife, family, and friends was
an unquestionably a key factor that took me to the day when I held
a copy of my book. This is almost the moment of triumph. Almost
the moment because any book, no matter how good it is, needs
marketing. Without good marketing readers will not know it exists.
As before, my work was far from being over – it was just starting
again. This was the time to think about the series of next steps,
such as marketing, teaching seminars, and creating other tools that
will be useful to small businesses. I also came to realize that Loan
Financing Guide for Small Business Owners is only the first step in
educating small business entrepreneurs on loan financing matters.
What’s next?
The word about Loan Financing Guide for Small Business Owners
is slowly but surely spreading. While I did not write the book for
lenders but rather about them, as it turns out lenders are another
group of my potential customers. The comments I have been
getting tell me that lenders have bought my book as a gift for their
small business customers. It seems like a win-win situation. While
lenders do not have the time to educate small business
entrepreneurs, they can refer them to a good source of information.
In addition, the book has proved to be a good resource for people
making first steps in the lending career.
As with any useful tool, my book is just the beginning of my path in
small business training. For those people who do not feel that my
book will benefit them, I have been creating articles and other free
educational tools on how to overcome their loan financing
obstacles and problems. Over the last couple years I have been
gathering questions and providing answers to business owners who
reach out to me individually. In addition, I have been encouraging
and receiving requests from lenders to cover certain topics that
they would like covered.
People frequently ask me why I would want to spend so much of
my time writing articles, teaching seminars, and doing other things
for free or at nominal charge. The question seems to make sense,
as that’s what we, lenders, expect our borrowers to do – make
money and be profitable so they can repay our loans. For me the
answer is quite simple – create good products and show your
dedication and the money will come. Besides, while my book and
other projects are certainly not the way to become rich (not
exactly the American dream), I feel a lot happier helping people in
their lives and feeling a sense of contribution to their successes.
Perhaps it is a result of spending some time in Vermont and
Cambridge, MA where non-profit work and contribution to your
community are still valued. But who really cares about the reasons?
The bottom line is to do what brings you a sense of satisfaction and
accomplishment. Everything else is secondary.
A few years into my lending career I began to get bored with the
mundane routine of looking at one small business loan request after
another while being hundreds of miles away from my applicants. I
did not see the final results of my work, did not feel a sense of
accomplishment, and did not believe that my work had value.
Furthermore, I did not have an opportunity to communicate with
my borrowers and help them become more financially savvy. My
job was to help in the approval or rejection of loan requests, no
questions asked.
I felt under-utilized and restless at work, and I began to consider
changing industries. When I was almost ready to leave the world of
commercial lending, I started to think about what I could do in my
current position to satisfy my needs as well as those of my
customers. After many different ideas, some of them so ridiculous
that I will not mention here, I was intrigued by the idea of
becoming a small business owner – just like my customers. An
entire year or more was spent exploring a number of business
concepts and researching the market about them, but nothing
seemed to be the right fit for me.
I met several trainers whose lending careers took them into the
field of professional education. They were teaching classes for
lenders, and their work took them all across the US offering
training that helped people succeed in their jobs. I cannot recall the
exact details, but one day I had an “enlightenment” – why can’t I
use my professional knowledge and begin helping small business
owners? Of course, at that time it seemed like a strange career
path. It was almost doing things backwards. I shared my idea with
a few co-workers. While no one said anything negative directly, I
felt that I was getting strange looks. One colleague did tell me that
I did not seem to have focus on my work, and this was the main
reason for my “soul searching”. He went to say that some of my
ideas were equivalent to non-profit work and there were enough
non-profits providing training to small businesses. At the end of the
day, I did not meet a single person in my industry who thought this
was a promising idea. Well, looking back on my first steps I have
learned one thing – let people do the talking, and I will do the
walking. The worst thing one can do is to give up even if no one
supports his or her efforts and ideas.
Defining small business…
Before I continue with my story, let me try to define the phrase
small business. Some describe a small business by the number of
employees in a company, while others by the size of a business’
annual revenue. Large lenders, such as Bank of America or
Citizens Bank have one definition, while smaller commercial banks
such as Cambridge Trust or Wainwright Bank have another.
Nonetheless, we all tend to agree that the characteristics of a small
business is revenue between $0 and $10 or even $15 million, and
a business that has from 0 to about 100 employees. As for small
business loans, they are commonly defined as loans from
$100,000 to probably $3 or even $5 million; this threshold is
constantly being raised by lenders. Loans under $100,000 are now
affectionately referred to as micro loans.
The beginning
The more I thought about training small business owners, the more
I began to notice that many small business loan requests either did
not have a chance of getting approved or small business
entrepreneurs applying for loans were making the same,
unnecessary mistakes. I worked with many entrepreneurs; from
start-up go-getters trying to launch their first ventures to incredibly
wealthy small business owners whose companies could be called,
for lack of a better expression, “cash cows” (businesses that
generate very strong cash flow). My conclusion was the same –
many businessmen and businesswomen did not seem to have the
knowledge of fundamentals, let alone more complex things about
securing loans on the best possible terms and successfully repaying
them.
What do lenders expect? What are they looking for? How can I
prepare my loan request the right way in the least amount of time?
What are lenders’ pet peeves? What kind of behavior do they
appreciate and even reward? These are some of the key questions
a small business owner would want answered. Another benefit of
such knowledge is that it will help you be successful throughout
your small business ownership career. As I look back on my
experiences, I begin to understand the reason for the lack of small
business education and training when it comes to loan financing.
Lenders are not educators and coaches. They are lenders, and this
is what they do best. They do not have the time to explain the
basics and even more advanced topics. The incredible competition
among commercial lenders has led to almost a conveyor-like
approach to small business loan review and approval.
So, I decided to fill in the educational gap. It seemed to be a
perfect fit for me. I will bridge the knowledge and communication
gap between lenders and small business owners and find ways for
each group to understand the others’ needs. As overly-ambitious
as it may sound, I did not see any reason why I could not do it.
Perhaps the scale of my endeavour is what made it particularly
exciting for me. Of course, I may fall miserably short of being an
Amerigo Vespucci discovering America, but I can at least try to
create something unique that will make a difference in people’s
lives.
One step at a time
Now that I had a vague idea of what I wanted to do, the next
question was how to achieve my goal. Without a clear path in
mind, I began writing articles that covered issues that I though
small business owners needed to be educated on. By the time I
was done with my third article, it occurred to me that I could write
a book that will be a manual for small business owners, both
beginners and experienced ones. I became infected by the book
writing bug, just like millions of people in this country. As if there is
not enough competition in the publishing world, here comes a
banker trying to make his voice heard.
I quickly moved past the initial excitement of feeling almost like a
genius (mind you I will never qualify). I had a pretty tough task
ahead of me - writing my very first book outline and table of
contents. The main challenge was to create a format that would be
easy to read. The only way I could develop a successful table of
contents is by creating a road map. After struggling for a couple of
months, my table of contents ballooned into a 3 page essay. At
that point I decided to scrap my efforts, practically delete
everything, and start all over.
The second try focused on laying out a path that would mirror the
process a small business owner goes through in applying for a loan.
This meant that every business owner first needs to realize that he
or she needs a loan, try to figure out how much money is needed,
apply and secure a loan, and then make sure that the loan is
repaid. I wanted to equip the small business owner with the
knowledge he or she needs along the way to make the loan
financing journey more successful and manageable. My goal was
not to look at competing books’ tables of contents but to create
something that will be unique and most importantly effective for
people of various experiences and various levels of familiarity with
the world of finance. Now that I finally had a table of contents,
things got a lot easier, or so I thought. In reality, this was not even
the beginning. Now it was the “dark period”, writing page by page
something I would some day call a draft.
I think every sizeable undertaking goes through periods of ups and
downs. The creation of a draft was one of those moments in my
life when I was truly involved in something and at times felt like my
Loan Financing Guide was my whole life. The learning curve was
incredibly steep. Trying to establish my writing style and also trying
to stay focused on my audience and my topic was anything but an
easy task. As a result, my work was a periodic avalanche of
checks and balances to ensure that I stayed on track.
Writing was also extremely challenging because during the day I
was a commercial banker. The only time available for writing the
book was evenings and weekends, which meant that for a period
of about 2 years I had to juggle my job, my book, and my
personal life. One moment I was enwrapped in a sense of elation
and the next moment I was completely exhausted and
overextended with the amount of work. Twenty four hours in a day
seemed like a very short period of time, particularly since sleep is
required. The moment I finally put the last period in my manuscript,
it was time to celebrate.
The rise of Loan Financing Guide
After the manuscript was completed, I began the challenging task
of editing the book and going through the steps of publishing it.
Throughout this process I discovered how tough and competitive
book publishing is. I had to find the right people to help me with
the book design, production, printing, and distribution. Some of
them were excellent and made my work a lot easier, while others
made my project a nightmare.
Despite all the obstacles, the day came and a printed copy of my
book arrived in the mail. I was truly speechless (although I did not
admit it to anyone at that time). One thing is to write and constantly
think about the book you are creating, it is another thing to actually
hold it in your hands. I cannot describe the feeling in words, as I
will be doing a disservice to that moment. Looking back at the
entire process, I realize that I have overcome everything thanks to
focusing on the small business owners whom my book will help to
get their businesses a step closer to becoming financial successes.
Needless to say, the daily support my wife, family, and friends was
an unquestionably a key factor that took me to the day when I held
a copy of my book. This is almost the moment of triumph. Almost
the moment because any book, no matter how good it is, needs
marketing. Without good marketing readers will not know it exists.
As before, my work was far from being over – it was just starting
again. This was the time to think about the series of next steps,
such as marketing, teaching seminars, and creating other tools that
will be useful to small businesses. I also came to realize that Loan
Financing Guide for Small Business Owners is only the first step in
educating small business entrepreneurs on loan financing matters.
What’s next?
The word about Loan Financing Guide for Small Business Owners
is slowly but surely spreading. While I did not write the book for
lenders but rather about them, as it turns out lenders are another
group of my potential customers. The comments I have been
getting tell me that lenders have bought my book as a gift for their
small business customers. It seems like a win-win situation. While
lenders do not have the time to educate small business
entrepreneurs, they can refer them to a good source of information.
In addition, the book has proved to be a good resource for people
making first steps in the lending career.
As with any useful tool, my book is just the beginning of my path in
small business training. For those people who do not feel that my
book will benefit them, I have been creating articles and other free
educational tools on how to overcome their loan financing
obstacles and problems. Over the last couple years I have been
gathering questions and providing answers to business owners who
reach out to me individually. In addition, I have been encouraging
and receiving requests from lenders to cover certain topics that
they would like covered.
People frequently ask me why I would want to spend so much of
my time writing articles, teaching seminars, and doing other things
for free or at nominal charge. The question seems to make sense,
as that’s what we, lenders, expect our borrowers to do – make
money and be profitable so they can repay our loans. For me the
answer is quite simple – create good products and show your
dedication and the money will come. Besides, while my book and
other projects are certainly not the way to become rich (not
exactly the American dream), I feel a lot happier helping people in
their lives and feeling a sense of contribution to their successes.
Perhaps it is a result of spending some time in Vermont and
Cambridge, MA where non-profit work and contribution to your
community are still valued. But who really cares about the reasons?
The bottom line is to do what brings you a sense of satisfaction and
accomplishment. Everything else is secondary.
| Author |
| Loan Financing Guide for Small Business Owners |
| "Empowering Small Businesses" |
