There’s an old sales cliché: If you don’t ask your customers to buy, they won’t! Meaning, you’ll never know if your customer would be interested in a new product or service unless you ask them.
In working with banks and providing an Accounts Receivable Funding Program through RMP Capital’s Community Bank Program, we have found this to be very true. Many loan officers just assume that their customers would not be interested in funding their receivables for many reasons. Such as, it’s too expensive; they are not borrowing now; I know that guy and he would never do this; he’s got good credit and doesn’t need to do that; or, I think their cash flow is OK. As a result, opportunities are missed because the loan officer is assuming.
The following is a true story about how one loan officer almost missed a great opportunity:
A loan officer at a bank in Virginia called one of his customers and said “Mr. Customer, the bank has a new program specifically designed to help growing companies. It increases cash flow by funding receivables on an ongoing basis, similar to a credit card program. Would you be interested in hearing more about it?
The loan officer was amazed when the customer said, “yes.” And, when he spoke to our consultant about setting up a time for us to talk about the program, the loan officer said, “I don’t think this guy is going to want to do this, because his credit is very good and he isn’t borrowing any money now.”
This business was a commercial heating oil distributor with about $900,000 in outstanding receivables, doing $500,000 in sales a month, which means the receivables turn was averaging 54 days.
Upon talking to this business owner about future growth opportunities, he told us he was in the process of getting ready to sell about $1,000,000 of assets to raise money to fund a major expansion. After we explained the program, he determined that he did not need to sell his assets. He could tap into his accounts receivables, usually a frozen asset, and fund his growth himself. At this point, the loan officer’s jaw about
dropped to the floor! This business owner never even considered coming to the bank to borrow the money. If he couldn’t fund it on his own, he wasn’t going to do it.
The bank experienced incredible fee income and deposits skyrocketed, as the business realized its full growth potential! But, it never would have happened if the loan officer had assumed and didn’t ask the question.
RMP Capital Corp., headquartered on Long Island, NY, provides a hybrid, turnkey Accounts Receivable Funding Program for banks to offer their customers and prospects at no risk or cost! Accounts Receivable Funding is an alternative to traditional bank financing, specifically to increase cash flow and fund growth. Give us a call to see how RMP’s Community Bank Program can work for your bank.
Chuck Stover, Manager of Bank Relations