“Ed” owns an outdoor clothing and equipment store. While he did well selling clothing and footwear for camping, hunting, skiing, and other outdoor recreation, he wanted to expand his store. He needed room for additional inventory that would now include kayaks and paddles, tents, skis, and other equipment. While profitable, those products are large and require much additional space.
He came to us for a loan for leasehold improvements. He needed several thousand dollars to knock out some walls and create another room to expand his leased retail space.
His plans seemed sound, and he was always ready with financial data we requested, which was also sound. However, our bank was in capital preservation mode, operating under a very conservative loan policy.
Loans for retail stores are often a challenge under the best of times. Our team presented the request before the loan committee.
The loan committee turned it down, citing the capital position of the bank and tough economic times. They felt that economic trends did not favor Ed’s plans, and that he would not be able to repay the loan.
Fortunately, Ed did not give up. He was able to find the financing at a competing bank, and expand the store as he planned.
I saw Ed recently in his much bigger store. With the expansion, he successfully reached the market he was aiming for. The store was crowded, his salespeople were working hard, and there were long lines at the cash registers. He is doing well.
Key to Triumph: Ed was not discouraged by tough economic times, even if our loan committee was. He was prepared with a solid plan, believed in it, and was able to sell another bank on his plan.
**NOTE: All “Bankable Stories” were written by One Click Advisor founder James Chittenden and are true stories of clients that he assisted as a business banker. Names have been changed to protect client confidentiality.