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How the bank really judges you!

I don’t have to tell you that relationships in business are critical. In fact, in my experience, they can be the difference between making it or totally imploding.  James and I have always gravitated to our tribe, that is the people who have been there for us (and us for them) and wherever possible stuck with them through the tough times.  We’ve understood that at times this has meant making sacrifices in order to be true to our word.

Some of you might have heard the story of how we begged our initial bank for a $10,000 overdraft facility in the early days of Au Pair Link. We got rejected. However, purely by coincidence we came across a bank manager at the BNZ who believed in us. At the same time, we’d found a way to turn around our business and we had our first major payment deposited into the business account, our manager called us in shock asking if it had been mistakenly deposited. And I said “Well no and yes, no because the money belongs to us, but yes now that we’re actually doing what I said we would, I’m cashing it in and depositing it with your competitor”.

It was a fast lesson for me of how quickly allegiances can change. The next time we asked the bank for money was for My Food Bag. At the time we needed to raise about half a million dollars and the bank offered to lend us the entire amount (basically unsecured as we had no house at the time). Staggered by their belief in us we decided against this fully debt funded approach and instead brought in a founding group of shareholders who had the skill-sets we needed to help execute on our plan. So, while the bank ‘came to the party’ we ultimately didn’t need them to the same degree but their sheer belief and support in us made us stick with them.

At the time we asked our BNZ bank manager why he offered us the money and he told us in no uncertain terms that how the bank assessed opportunities was primarily based on the people involved. And he believed in us. It was that simple.

Through that process I really learnt that at the end of the day people back people. While some ideas might be great, if you don’t have the right person to do it, it will go nowhere, or have limited success. So while our original bank didn’t back us, our next bank did and they have ultimately been greatly rewarded because of that faith. So pick your people and make sure that you know who you are and what makes your business tick before you ask for $$.