Page 78 - Wire Rope News & Sling Technology - April 2019
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BUSINESS LOAN                      without being familiar with a lending   chamber of commerce or other business
         continued from page 32             platform’s security provisions.”   improvement group.
         you  to succeed,  they have  their  own
         private investors to answer to.”   Due Diligence                      Compare Offers
           A second risk arises from the dis-  As  the  above  comments  suggest,  a   Smart borrowers shop around. “Ap-
         tance between you and the nonbank   lack of regulation means an absence of   ply to at least five or six lenders, be-
         lender. The organization providing the   standardization  in  lending  practices   ing consistent in what you tell each
         money has no knowledge of how your   and limited safeguards for borrow-  one,” says Holt. “Do your homework
         business operates.                 ers.  “It’s  even  more  important  than   by studying their websites and asking
           “Without a working relationship   ever  for  borrowers  to  engage  in  due   about their expectations. See if they
         with the debt holders, you have lim-  diligence concerning lenders and their   are listed with the Better Business
         ited flexibility in renegotiating terms   policies,” says Beeson.     Bureau and find out which ones have
         down  the  road,”  says  Vrancik.  “In   Among other things, due diligence   had complaints filed with your state’s
         contrast,  local  bankers  will  often  be   means talking with references.  “Find   attorney general.”
         motivated to see your business suc-  out if the lender has been in business   The only way to accurately compare
         ceed, especially if they anticipate pro-  a long time and with whom they have   loan offers is to compare APRs, making
         viding you with services in addition   done business previously,” says Holt.   sure that the figures reflect both inter-
         to the current loan. For example, you   “Interview their previous and current   est rates and service fees. One thing is
         might be able to negotiate an exten-  clients — and makes  sure  the  people   virtually certain:  Your cost of money
         sion of payments or a waiver of a pro-  provided as references really are their   will  be higher  at alternative lenders
         vision for a couple of months until a   clients.” Avoid vulture lenders, who of-  than at commercial banks. “These plat-
         big contract comes in.”            ten charge excessive interest rates and   forms are not giving away money,” says
           Finally, bear in mind that nonbank   demand quick repayments.       Vrancik. “They want to be compensat-
         lenders are not subject to many of   Getting unbiased feedback can be a   ed appropriately for their risk.”
         the same regulations as traditional   challenge — all the more so if you rely   If cash is costly from alternative
         lenders. That raises questions, says   only on reports from your competitors.   lenders,  sometimes  paying  a  higher
         Vrancik,  about  what  they  do  with   “Businesses outside your industry are   rate  is  the  only  practical  solution  to
         your business information. “I would   more likely to share honest insights,”   a  business  problem.  “If  you  need  the
         be concerned about offering sensi-  says Holt. “Make  yourself  an active   money and have to bite the bullet,
         tive information online, or providing   member of a larger business  commu-  then you do  it,”  says  Vrancik.  “But
         a  direct  link  to  your  bank  account,   nity.” Network  with  members of your   first, do your homework.”  WRN
         CROSSWORD                      by Myles Mellor           Answers on our website:

         Across                         Hints are often found in recent issues of Wire Rope News!
           1  Weakened condition induced by repeated stress, 2 words   20  Reduce the temperature of
           8  Vendor request, abbr.                            21  Perfect
           9  Cover steel with zinc                            22  Dock rope material
           10  Grade                                           24  Retirement nest egg, hopefully
           12  Stored wire ropes, e.g.                         25  Tantalum symbol
           13  Tool used to give the desired form to metal     28  Leave
           15  Source
           20  It can lead to cracking and weakening
           23  Important engineering ratio, 3 words
           26  Spool
           27  Period when products are tested
           29  Amercian Uncle
           30  The only bridge built with Brady splices

           1  Siemens ____, a steel-making process
           2  Strike gently
           3  Pulling
           4  Ready to go, 2 words
           5  ___ flash, 2 words
           6  Joining
           7  Cause
           11  Cry of a crow
           12  Type of steel used in wire rope
           14  Silver symbol
           16  Business going public
           17  Turns
           18  Fe, on the periodic table
           19  “When you find you’re in a hole, stop digging” is an
               example of one
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