The three P's of a commercial lending boomKellene Bishopprepared, positioning, poise
Have you heard there's a boom in the commercial lending world?
If not, tune in a little closer and sharpen up your reading skills,
because you are likely to soon be barraged with information about
it - and not just from magazines specific to the lending world. Big
news, like a boom in lending, no matter the specific market, will
hit blogs, radio shows and television financier programs in no
time. Wells Fargo bank
recently stated that there is now more than $1 trillion worth of
commercial loans that must be refinanced between 2008 and 2010.
Yes, you read that correctly - $1 trillion. Can we all say "wow"
together? It's real, it's going to happen and I plan to be a part
of it. How about you? Will you be tuned in enough to be ready to
handle such business as it inundates the market?
To help you get ready for the impending boom in the market, I've
put together what I call the three P's of a commercial lending
boom. The first of the three is being prepared. Yes, you might be
saying, "Well, duh!" Although I frown on that particular saying
normally, in this case, I can see your point. However, being
prepared means more than just saying, "I'm up for it." It means
taking the actual steps to being prepared, such as:
Knowing your lenders
Who's available to you in particular? Have you made solid
relationships with these lenders yet? What are their products? In
knowing your lenders, you know what you have to offer the
clients.
Knowing your niche
Have you decided if you want to specialize? When the tide comes in
with $1 trillion worth of commercial business, are you going to run
around willy-nilly, trying to fund anyone and anything, or are you
going to hang a shingle out stating who you are and what you can
offer so you will attract the kind of deals you can actually
close?
Knowing how to market and where
Once you know your niche, the business could come knocking on your
door, or you might just have to go out and cultivate the crop a
little before you can harvest. Get a solid marketing strategy up
and running now - not the last week of 2007! Make a name for
yourself now and begin your reputation before the tide comes in and
all the flow has flowed on past you!
The next P in my sequence is "positioning." Many of you may have
heard of positioning as it refers to marketing and perhaps on the
stock exchange, and while those are similar, this type of
positioning is more similar to the kind of positioning you find on
a sports team. For example, what position you play on a football
team makes all the difference as to what you learn how to do and
what you are prepared to do. Sure, all players have to know what a
football is and be prepared to run, practice, catch, throw, etc.,
but where each one stands, how he receives the ball and whether or
not he runs yardage or has the ability to kick will qualify him to
play a particular position. The same principle applies when it
comes to the commercial lending industry. All brokers must know
about rates, fees, loan-to-value ratios, credit scores, etc., but
the specifics you know, how good you are at what you do and your
knowledge base will determine where you are able to position
yourself for the future flow of business. Do you want to get
knocked over by the tidal wave to come or do you want to ride the
tide all the way in? The importance of positioning yourself through
your preparation, marketing and knowledge of the market is going to
put you on the path to enjoy the wave, rather than get drowned out
by it!
The third P in the lineup is "poise." Now, when you think of
poise, you might think of a super-slim model on a fashion runway,
but that hardly has anything to do with the world of commercial
lending (although I do fancy myself a snappy dresser!). "Poise,"
according to Merriam-Webster, actually means "to hold or carry in a
particular way; to put into readiness." For our purposes, "poise"
will mean to hold yourself or your business in a particular
position or to put it into readiness. It will mean readying up your
lending relationships, your marketing plan, your office and, most
importantly, your state of mind. Are you truly ready for the
onslaught that big-time business can bring you? Do you have the
energy, the mindset and the manpower in your office? Can you
withstand the pressure of possible numerous deals being handled all
at once? You need to seriously ask yourself these questions and
address any holes you have in your business arsenal. Are you
positioned and ready mentally and emotionally for increased
business as it comes your way?
Remember, you won't have the luxury of just hoping to be
prepared, positioned or properly poised once the wave actually
hits. (Say that one 10 times fast!) Now is the time to gather your
wits about you and do what you need to do in order to be ready.
Even if you consider yourself a seasoned pro or you've just now
begun riding the commercial lending wave, surf's up - it's time to
make sure you're truly ready! As you envelope the principles of the
three P's, I encourage you to do so by diving into commercial
lending education and gathering the knowledge you need. Also
consider finding a mentor if you need one, or a colleague to lament
to when the ride gets too tough and you need a boost or some
professional suggestions. Make the connections you need to make now
and be prepared to ride the wave!
Kellene Bishop serves as president of Beehive Commercial
Lending, as well as the director of training for Commercial
Career, which specializes in training residential loan officers in
all aspects of commercial lending. She may be reached at
[email protected].
