Most bankers don't know what's in the best interest of your company.
They can tell you if they will underwrite the deal or not.
They can tell you if the debt-to-income ratio makes sense or not.
They can tell you if the business cash flows or not.
Kyle and I went to Wells Fargo recently to add him as an owner to my business being we're married.
To give context I'm a premier customer that runs millions through the account which I've had with them for 17 years.
Banker: What do you do?
Me: Scale, Buy and Sell Businesses
Banker: I've never met anyone who specializes in that. You must be successful
Me: I do ok (I know damn well she's looking at the account LOL!)
Banker: Why don't you build business credit?
Me: I don't believe in debt and I have cash.
She blankly stares at me for a sold 30 seconds .... speechless.
We get in the car and I tell Kyle what she doesn't understand is the operations of the business.
My business doesn't require equipment, inventory, vehicles, furniture, fixtures and all the things you would utilize credit for.
We run lean, we're boutique and there's appropriate margins.
Business credit is good for specific businesses.
But if the banker doesn't know your business, they shouldn't be making suggestions like building business credit when that actually has no effect on the top line, bottom line or evaluation line.
This is why it's so important that as a successful business you have other BUSINESS OWNERS around you that know your business! So you can have discussions outside of attorneys, accountants and banks. Because not all advice is wise advice.
Ready to Buy or Sell? Reach out at 763.482.2681 or Email MK@BlueCollarBusinessAdvisors.com