Published May 15, 2015 | Updated April 26, 2021
You’ve Googled. You’ve talked to other businesspeople. You’ve created a list of must-haves and like-to-haves. You’ve checked a long list of financing companies against it.
You’ve got your shortlist; now it’s time for tough questions. The kind that make financing people sweat. The type they should be asking themselves every day but probably aren’t. The kind that can help you separate financing companies from financing partners, partners that fund the deals you bring them, work with you to bring in more business, and as a result, close more deals.
Though you’ll end up asking many questions of prospective financing partners before committing, it can be difficult to start the process in a way that puts you in control of the sales conversation. Without that control, you’re likely to get distracted by a barrage of features and benefits that may or may not be relevant to what you’re doing and what you want to achieve.
To help you cut through the clutter and get right to the heart of the matter—what’s in it for your business—here’s a cheat sheet with three of the most important questions to ask:
1. In the past 12 months, what have you done for businesses like mine?
Why it can be a tough one: some salespeople are prepared only to give you a list of generic benefits. Others have specific examples that don’t pertain to your industry. Still, others have specific examples of what they’ve done for customers in your industry, but they’re old ones that haven’t been updated in years. Relatively few can offer specific, relevant, and recent examples.
Why you need to know: your financing partner should know what it specifically offers your industry. It should know how to get results for businesses in your industry, both in periods of industry growth and contraction. And it should have a current track record complete with recent examples of doing so. Otherwise, you’re looking at an unfocused finance company that’s not clear on its strengths and how to put them to work to meet the unforeseen opportunities and challenges in your industry as they arise. Or a financing company focused on other sectors. Or a generalist financing company not equipped with the knowledge needed to offer anything more than one size fits all products and services to your company. None is the best choice for a partnership that’s going to last for many years.
If you’re in a rapidly changing field, specific examples may be hard to come by. Still, a financing company representative should be able to give you recent examples with at least some relevance to what you’re doing. Also, keep in mind that financing across a range of industries is not a negative thing in itself, as long as the financing company maintains expertise in all the industries it serves.
2. What will you do for my business?
Why it can be a tough one: this is where the sales conversation goes completely off-script and into uncharted territory. Or at least it should.
Why you need to know: your financing company representative has ideally given you specific, relevant, and recent examples of what the company’s done for others in your line of work. They have demonstrated knowledge of who your customers are and what they want—maybe your rep pointed out things you haven’t even considered. If so, great. But to this question, what the company will do for your business, there should be no ready answer. Why? Because the representative doesn’t yet know your business, not to the degree they should to get you the best results. They know businesses like yours and customers like yours. But not yours. So beware of off-the-shelf, pat answers. The best answer here is not some canned summary of benefits but rather an expression of interest in getting to know your business and its customers in-depth. Only then can your rep begin outlining what they can do for your business, followed by creating a plan to do it.
More than anything, this question is about assessing a financing company’s willingness to do business the way you do in any economic climate, not the other way around. It’s about a team that wants to know how to best serve you and your customers, not a generic approximation. So, when you ask, “What will you do for my business?” what you want to hear is, “I don’t know, not yet. But I’m excited to work together and find out.”
3. What can you offer that no other financing company can?
Why it can be a tough one: zeroing in on what makes your business different than all the rest is one of the hardest things a businessperson has to do, especially in a crowded market—which, let’s face it, is most markets.
Why you need to know: many businesses operate for years, even decades, without ever coming up with a satisfactory answer to this question. Even those that do manage to differentiate themselves often don’t hold onto that difference for long – come up with a unique selling point, and pretty soon, everyone’s got the same selling point. So, isn’t this an unfair question to ask? Not really, and here’s why. The financing company you should be working with never rests on its laurels. It knows that its unique advantages today won’t be unique tomorrow, so it’s constantly innovating to meet current and future needs. It’s always looking for a way to serve its customers better, to stay ahead of the curve. As hockey’s great Wayne Gretzky famously said, “I skate to where the puck is going to be, not where it has been.”
A forward-looking company is always skating to where the puck will be, continually anticipating its customers’ needs, and reinventing itself accordingly – making it an ideal choice as a financing partner that will serve an integral role in helping you do better business for many years to come.