Dear Mr Banker,
I’m so sorry for all the troubles I’ve caused you. I know you are a busy man, and have far more important clients than little old me to visit.
But I thought I would write to you anyway and tell you that I’m doing alright. My business is growing and I couldn’t be more excited! With my success comes a problem, a problem that hurts me in a manner that seems unjust and cruel, but yet accepted by the good people who walk this earth. Every time I venture to sell a product that I’ve poured sweat and tears into making, I always hear that dreaded sentence from the buyer – ‘I’ll pay you in 30-60 days’. If I had a nickel for every time somebody said that to me, I would be, well, rich! And now I’m growing so fast, I often don’t have enough money in the till to pay for those components I use to make my product, despite the fact that there seems to rather large line of buyers standing outside my oh-so-modest-shop.
I know. How silly of me. I know I should know better. It’s tough sometimes running this business on my own. I don’t have any of those fancy inventory management systems, and even though I invoice my clients regularly, they rarely pay me on time. I have three full time hires, well I had three, until one day one of them decided to take an extended lunch break and that was the last I saw of him. On his way out he also made off with money from the till, which could probably afford him a rather fancy lunch at a Michelin star restaurant for his entire family and also some of his friends. I do hope they enjoyed that meal though. I would hate to hear that the steak was over cooked or the wine a little too dry.
Of course Mr Banker, I’m sorry, these matters are not your fault, they are mine and mine alone. I know you asked for financial information, but those accounts you asked for are not up to date; my accountant, rascal that he is, keeps avoiding me like my overweight nephew avoids the gym. Clearly he has other clients to deal with, and so I am lower down the priority line for him. My auditor is much the same, sadly, but let me see what I can do.
Now, about those financials, dear Mr Banker, I’m sorry, I’m afraid I don’t really understand what you mean by DSCR, quick ratio, financial leverage and all that other mumbo jumbo. I studied engineering at college, and didn’t really pay much attention to any finance electives, forgive me but I don’t think you could blame me for that. I am sure these terms are terribly complex, and you are so smart for understanding all of this better than me. But what I do know is that my little engineering outfit is doing well, creating parts for the automobile industry, so big wheels keep on turning (as Tina Turner sang). Yes, I know we are a small cog in a huge wheel, but from what I can gather, my clients are all very well respected, and when they do pay, I do have more than enough money to pay off any shortfall I should be carrying forward from previous months. This is what I hoped an overdraft would help me out with. This way, I can secure more orders more confidently, so that I can buy some inventory, and pay wages. And hopefully, have some money to take my employees for a rather nice lunch.
But forgive me, I am getting ahead of myself. I tend to let my imagination run wild, like Alice when she first peeped through that rabbit hole. You know sir, as a child, I used to love tinkering with machinery parts. I was fascinated as to how such small components could be put together to make something which helps move things faster, better and more efficiently than before. Definitely a case of the sum of the parts proving to be greater than the whole…
I’m sorry, I’m boring you with my rambling, let’s get back to your questions. What of bounced cheques, you ask? Sir, the only time I ever had a cheque bounced was about 4 months back, because we had grown so rapidly, and I was waiting for a customer’s payment which came a tad too late. When I say a tad, I mean a day. The accountant assured me that the cheque was on it’s way, so I wrote a cheque out to a supplier who insisted on a down payment for a new order. Turns out that the accountant, rascal that he is, sent me a post dated cheque, which is why my cheque to the supplier bounced due to insufficient funds. I paid the amount of straight away, as you can see from my records, and hopefully, an overdraft will help me resolve this very situation occurring again.
My personal credit history? What does this have to do…? I’m sorry, yes, of course you have procedures and rules to follow, ofcourse all banks require this as standard practice. Well, I’m lucky enough to never have taken a loan in my life… credit cards? I think my business partner, the other director has one…. What? She has an unsettled balance of Rs 2,000 from 6 years back, which has affected her what? Credit score? Sir, I’m not sure what this is, but I can tell you that she is a wonderful, caring person, who would never allow something like this to happen unless she completely forgot about it, or moved apartments and forgot to put a forwarding address for her statements. Besides, it is Rs 2,000, I am sure it can be settled immediately… Sir, surely you can’t decline my application on such a petty issue.
Of course, of course these matters have nothing to do with you. I’m sorry once again for taking the time to explain this to you. It’s just that I have nowhere else to go. Apart from the private loan shark around the corner who is charging me 30% flat on a working capital loan, but I know this is not want I need. Besides, I’m not sure I can afford the interest, or the broken leg should I default…
Thank you once again Mr Banker. And for the final time, I’m sorry.
A small business owner