Qualify the Easy Way

Using a Quick Summary 

For transactions where I’ll need a complete financial statement package, I use an incredibly simple but incredibly powerful sales tool I call my Quick Summary.  This qualifier helps me predict my chances of approval and helps me determine what pricing I can use but its real purpose —and real benefit— is helping the prospect be realistic about both of those things.

As I’ve said before, I’m all about low pressure selling and about moving as much pressure as possible off of me and on to the customer, where it belongs.  It also helps me be sure I’ll get complete statements because using the tool as designed pretty much requires the customer to have them in front of them.  This is something you have to have prepared in advance.  I keep a hard copy with me when on personal calls and have copies ready for immediate faxing or emailing as needed.  That’s because this tool needs to be in front of the customer and the customer needs to fill it out.  You can help, though.

What I did is get with my primary underwriters and get a consensus of the key information they needed summarized from the complete financial statements.  I then created a form that that provides for both pulling that information together and for summarizing it along with targets for those summary figures.  You can see a sample of the form by clicking here.

What I want to avoid is someone sending me partial statements or statements with losses or other problematic information.

Here’s how I use it.  Mr. Prospect, I wouldn’t begin to pretend to know your business and certainly couldn’t explain the financial side of it to my underwriters as well as you’ve explained it to me, but that’s exactly what I’m going to need to do.  So what I want to do for you, is take a moment right now and let you help me pull together the key information to make sure I present it properly on your behalf.

By now I’ve put the form in front of him in some way and simply go through it with him while we both are looking at the financial statements.  Now the first three blanks are for the net income for the last three fiscal years with a fourth for an interim period, so he and I are going to face the profitability issues immediately.  If there’s been consistent profitability, I’ll be very complimentary and keep moving along.  If there are losses, he’ll begin to explain them right away and I won’t have had to go back to him asking about them.  I’ll simply say, generally my underwriters are looking for consistent profitability but sometimes there are other conditions that will mitigate that.  Let’s continue.

The next thing my tool covers is Current Assets and Current Liabilities.  I’ll say, Mr. Prospect, what they’re looking for here, (and note that I say what THEY’RE looking for; I’m not judging him), is, (and I use a ratio that I know to be acceptable to most of my underwriters), a 1.2 to 1 ratio.  If the figures he provides don’t meet that, I’ll say: That’s just part of the picture, of course, let’s finish with the overall view before we start looking at what might be needed to offset that.

Basically I go on that vein, covering Cash Flow; Tangible Net Worth; Lease request as a percentage of Tangible Net Worth; Total Debt and Total Debt as a percentage of Tangible Net Worth and at each one I tell what the ideal or target ratio is so that he’s prepared for whatever we may face when we submit it.

If you’re not used to doing this, let me tell you, this isn’t anywhere near as difficult as you might be thinking.  Not if you’ll invest the time to develop a solid tool to use and then use it.  Full financial package leases can be very lucrative and extremely interesting to work on but they can also be very time consuming because of the information required.  What using this tool will do for you is three things.  First, it will let you know right away if your prospect is as committed to the process as you are.  If he’s not, how soon do you want to know that?  Second, putting this information together in one place where you both can look at it plainly will make your prospect VERY realistic about credit and pricing.  In a professional, supportive, and non-judgmental way, you’ve helped your prospect face the reality that they may not be the highest rated credit.  That’s okay, there are lots of avenues for getting the transaction done but would you rather have him tell you the situation or would you rather have to go back and be the one to tell him?  Third, by the time you’ve used this tool to pull a summary together, you’ll know exactly what financial information is available to work with and your summary of it will be a huge, and highly appreciated, head start on professional write up to send to your underwriter with the package.

I can absolutely promise you that it will take far less time to go through using this tool with your prospect than it will for you to go back and forth between your underwriter and your prospect getting everything this tool would have answered, but getting it one piece at a time instead.

And, if your customer won’t cooperate, or if the financial information is too bad to do anything with, and you need to decline the application, I’ll further promise you that you’ll have spent far less time finding that out using this tool, than you would have spent finding it out one piece at a time.

This is a tool that takes a little effort to create and absolutely has to be created in concert with the underwriters you use.  Get with your underwriters to help you identify the best information to summarize and assign target amounts and ratios to use in it.

Here’s a brief Flash® based tutorial about using this valuable sales tool!

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