No matter what you hear about technology, algorithms, and lending platforms, relationships are still king in the world of specialty trade finance and purchase order funding. With each transaction differing from the next, how can we expect to treat all of them the same?
I will start by saying that every lender has their own formula for underwriting trade finance opportunities. Most call it their “credit box”. At STAR Funding we have a checklist that is about 20 points long that helps us underwrite purchase order funding transactions. Lenders will tell you, “it’s not personal”, but when your lender relies on your expertise and guidance to complete a transaction, it gets personal. As the client and borrower it’s up to you to make your lender comfortable. Here are some tips for building great relationships with your trade finance lender to make sure you get all the support you need, and more.
Getting information from a client shouldn’t feel like pulling teeth. A professional that takes his/her business seriously is organized and plans well in advance. Share your information with your lender early on. If you trust your lender and they trust you there is no need to hide anything from them.
Often times a lack of information or supplying last minute information can make a lender feel a bit uneasy about a transaction. It can lead to questions concerning the last minute change or even total uncertainty of a transaction. Be proactive in your planning and sharing of information and not only will your transactions happen smoothly but the next time you request an exception you just might receive it.
Communication between a trade finance company is super important. The more information you share, and the greater detail with which you share it the more comfortable your lender will feel. Don’t ever assume your lender already knows the information, or already has it from past transactions. If you have something to share with them in regards to a transaction then make sure to do it at your earliest convenience. More information will always allow a strong lender to make quicker and better decisions in supporting your trade business.
Sometimes Bad News is Good News
If you come across an issue or roadblock in your trade transactions let your finance partner know immediately. There isn’t much that can’t be fixed if you act quickly. If you are working with an experienced trade finance company they can help you problem solve.
If you keep it a secret and your lender finds out through a 3rd party you risk tossing the whole relationship right out the window. The worst thing you can do is hide bad news from your lender because they will find out eventually. As long as an issue is shared accompanied with a plan to fix it your lender will appreciate your openness. Do this and you may even win some brownie points for the next time you seek an over advance.
Get Some Face-Time
Where possible try to get some face-time with your lender and set up an in person meeting. This doesn’t have to be anything too formal. It can simply be a cup of coffee or a lunch next time you two are in the same city. There is nothing like talking business in person and spending quality time together. I know we are all busy, but make an effort here and I am sure you will see a positive return on the time spent.
Many entrepreneurs view their lenders as just another service provider. Truth is a lender can be much more than just another source of funds. The right Trade Finance partner can help you take your business to the next level. At STAR Funding, we are committed to taking our clients businesses as far as they will let us. If the transactions make sense, and we are confident in the performance of the entrepreneur there is no reason why we should say no to a funding request of any size.
About Avi Levine
Avi Levine specializes in trade finance and purchase order funding for consumer and industrial product companies. As a vice president at STAR Funding Avi implements creative financing strategies in order to help clients finance the production or acquisition of goods for resale.
About Star Funding
STAR Funding has been providing purchase order funding and other trade finance solutions for over 15 years to import/export, wholesale or manufacturing businesses. Offering a mix of talents in Letters of Credit, Logistics, Finances and Manufacturing STAR is committed to the success of their clients. Fully vertical in their approach to financing the needs of their clients STAR is funding transactions from $100,000 to $15,000,000.