How to Become Your Own Bank Lender

| Categories: Cash Management , Profit First

Blog by Fuel Accountants



Did you see the article about bank financing? If not, go back and read it, please. Ok, are you back now? Great!!

Let’s talk turkey (which is appropriate to do since we recently celebrated Thanksgiving). Dealing with banks can be challenging. It seems like they are always willing to lend us money when we don’t need it. And that’s why it’s important to have a good relationship with a commercial lender. So when you need it, you already know each other.

But what if you could become your very own lender?

Is that even possible, or am I delusional? No, it’s really possible in some circumstances.

Using our Profit First Cash Management System (PFCMS) we have been instrumental in helping our clients to become their own lenders. How? Well, it’s really quite simple. We first determine the amount of money needed, when it’s needed, and its purpose. Next we set up a separate bank account (Typically an interest bearing account). Next we change the allocation percentages to include an allocation into this new account. Then we just run the business as usual. 

When it comes time to have the funds available, behold, they are already there! Mission accomplished.

There is one more part to consider here, and it’s an important part, too…

When you invest money back into your business (and make no mistake, that is exactly what you are doing), it’s important that you get that money back. So your investment should come back to you with interest. 

You wouldn’t invest in the stock of a company unless you thought it would grow in value, right? Well, the same principle applies to your business. You are literally investing in your business. And any wise business investor (yes, change hats and be the investor now) would only make an investment that yielded an appropriate return, in a reasonable amount of time. 

So plan your investments ahead of time because that’s why you do all this business stuff in the first place. 

And you can call us if you need help setting all this up…

Need more advice?