Yes, We Know. We Have Previously Advised Otherwise...
- Make your business bankable
- Keep your business bankable
- And never expect your vendors to "bank" you!!
That still is very good advice.
Problem is, in today's economic climate, banks simply are not inclined to loan to retailers of ANY size, shape, or form! (We know; we've been trying to help retailers get financing, but with little or no success.) Yet, to fund growth, successful retailers badly need loans.
What's a retailer to do?
Adapt! Be like The ROI. Recognize that, in this New Normal, some vendors(!) may be willing to be your new "bank".
Of course, there are caveats! To borrow from vendors, retailers must:
- Do all of the preparatory work that they would do for a bank loan (Get a quick overview from this TOPICAL TUESDAYS webinar.)
- Treat this proposed transaction as formally (that is, at arm's length) as you would with a difficult bank.
- Offer to the vendors personally guaranteed promissory notes for all loans. (Yes, folks. This is not slow pitch!)
- Prepare and share integrated Cash Flow projections for the year(s) the loans will be outstanding.
- Make darn certain that you repay these loans on time, or preferably, early!
- Remember, if you disappoint your vendors, your "lender of last resort", you're toast!
Okay, for those of you with good memories who are about to shout "What?! You're now telling us to ask vendors for loans?!!", we reply,
"Yes, that's true.
Time's have changed, and so have we. In retail, as in life, adapt or perish!"
No comments:
Post a Comment