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Last Update: Thursday July 29, 2021

Key Idea: Choose A Visionary Banker

Pat Elmquest told us that they had bankers lined up to fund the expansion plans. More...

Key Question:


Have access to the money you need to finance your ideas.

In most cases, small business owners have to "beg" a banker to make them a loan. Bill and Pat approached the entire money-raising task with bold confidence. Because they were so well prepared and their research so detailed, they had five bankers who wanted to make them a loan. They choose the one who focused on the vision of investing in a place that would have great potential to contribute to the community. They rejected bankers they felt were negative.

Q: How does a growing business demonstrate that it is bankable to a bank?

A: Bankers are not risk takers. They operate on a very slim margin; the differential between their cost of money and the interest they earn on outstanding loans must cover the cost of bank operations and provide a reasonable return on investment to the bank’s stockholders. If a banker makes a bad loan -- a loan that has to be written-off -- it is the same thing as when one of our customers doesn’t pay us. The write-off is equal to the sales or revenue amount, the labor and inventory costs have already been incurred. The loss goes right to the bottom line. All companies have bad debts. In fact if you don’t have bad debts, your credit policies are too tight and you are losing sales. But companies that operate on a slim margin, such as banks, have to be particularly careful to minimize uncollectible amounts.

Obtaining a loan with less than a year of operating history and without collateral is very difficult for a small business owner. You must be prepared to shop and shop hard. Anticipate rejection and you will not be disappointed. Like Shiv, you are more likely to be successful at a community or local bank than at an office of a regional or national bank. Larger banks have stricter internal policies; smaller banks tend to vest more decision-making authority in the banker.

If you feel your business loan will be difficult to obtain, before approaching a bank, prepare a written financing proposal. This proposal should include your business plan plus the following:

Projected financial statements
Resumes of key management
Current customer list
Current supplier list
Amount of financing requested and purpose of funds
Demonstration of capacity to repay
In short, everything! You really want your banker to know you and your company. When you obtain an expression of interest, invite the banker to your business and show him or her how you operate. Inspire the banker with your passion for business and your loyalty to your business partners. If the banker believes a risk now on a small loan will lead to a big customer borrowing large amounts, then he or she will be much more likely to step outside of conventional bank financing parameters.

Think about it

Could you grow your business quicker with bank financing? Are you bankable?

Clip from: Mickey Finn

It is hard to imagine at one time this downtown was bleak.

Libertyville, Illinois: Discover how two men changed the face and the fortunes of a town. Pat Elmquest and Bill Sugars invested in their local community when no one else would. They dared to dream an impossible dream. The old downtown was virtually abandoned -- over 60% vacancy -- with pawn shops and the like.  Pat had bought a little pub; then with a $2 million loan, they expanded to make a brewery and restaurant... and the old downtown transformation was underway.

They were true pioneers ...the visionaries.  Today, Libertyville is an award-winning historic business district.

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Mickey Finn's Brewery

Brian Grano, Today's Owner & CEO

Founders: Pat Elmquest & Bill Sugars
412 N. Milwaukee Ave.
Libertyville, IL 60048

Visit our web site:

Office: 8473626688

Business Classification:

Year Founded: 1990

Choose A Visionary Banker

BILL: And so we talked to five banks that called us, three of which we kicked out right away because they had no vision. They're the traditional bankers--you walk in, you give them this business plan this thick with all the pro forma, all the numbers, two years of research and they say, `OK. Well, you tell us the worst-case scenario.'

And that's all they were worried about. I said, `No, I want a bank that has vision, that understands what we're doing here, what we're bringing to the community.' And there were two banks that had that vision, and we ended up going with First America. And they were right across the street at the time, and they -- First America -- helped us secure an SBA loan. We had the business loan for the brewery and equipment, the furniture and fixtures from the bank; the building loan for the building, which we paid through Mark Loeb, who was our builder; then the two personal guaranteed loans, plus the Main Street, OK?

HATTIE: All right. Any regular guy would go, `Oh, my gosh, can I handle this on my shoulders.' That didn't scare you?

PAT: Well, no, it didn't. Having spent 25 years in sales, I'm pretty much people-oriented. And so it really--and a lot of the customer base here was local people, a lot of people I knew. So it wasn't like starting a new venture, particularly. It was a new way of making a living, but I was really excited about it.

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