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Key Idea: Demonstrate That You Are Bankable

Shiv Krishnan was able to found INDUS without financing but he needed a banking relationship to grow his company.

Key Question:


Growing a company by reinvesting the profits from one sale into the next, often called “organic growth” is slow and painstaking. Business owners need cash to fund payroll while waiting to collect receivables for product or work that has already been delivered. This gap is often covered by a line of credit from a bank, where the bank takes a security interest in the underlying asset, the account receivable, and provides the cash to fund the operating costs that will generate additional sales and receivables. Shiv was actually able to obtain bank financing based on a purchase order from a customer. This is very unusual since the loan was unsecured and banks very rarely make unsecured loans. Shiv was able to demonstrate to the bank that INDUS had the potential to be a great company and a great bank customer. INDUS still banks at the first bank that provided a loan to the company.

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: INDUS - Diversity & Mentoring

From Just a Job to Being an Owner

Washington, DC: In 1979 Shiv Krishnan arrived here from Madras, India to go to college. He got a job and was doing well.  But in 1991 he risked everything to start his own business.  INDUS would be a technology innovator.  He did well. Today this company has 500+ employees and major clients including the US government.  They do Geographic Information Systems (GIS), database management, data warehousing and  mining, and more.

This story is about an immigrant to America. Like so many, he came with nothing, got a job to save money to start a business. When he put it all at risk,  he knew his safety net was to go get another job.  It wasn't easy... but that's the USA. This country is a beacon and inspiration to the entrepreneurial spirit within all of humanity.  When freedom rings,  new songs are written!

Shiv is a person who is open to learning from everyone. He empowers that  attitude among his employees, his suppliers, and his customers. He mentors people and he is always open to being mentored.  INDUS is part of SAIC's Mentor-Protégé program which has helped this business to grow. 

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INDUS Corporation

Shiv Krishnan, Founder

1951 Kidwell Drive, Eighth Floor
Vienna, VA 22182

Visit our web site:

Office: 7035066700

Business Classification:
Information Services

Year Founded: 1991

Demonstrate That You Are Bankable

SHIV: Basically this is a war room. We're in the second and final stage of a proposal.

HATTIE: If you win this contract, what's going to be the dollar volume?

SHIV: It'll add another $25 to $30 million in business to INDUS for five to seven years potentially seven years. The contract that we got from the Department of Justice Civil Rights, that was a $15 million, five year contract, (and that) gave you the potential of up to $3 million a year in revenues. That can be the death knell for some of the companies too because it all comes down to cashflow. The bank took a look at our numbers, our business plan and then felt comfortable about "I can trust Shiv. He's got a good solid plan", and initially that's where it starts.

The relationship is between the bank and the entrepreneur. So they gave me a loan. They asked me to sign up my house, my wife, my firstborn, everything. Meena and I, we still remember the look on our faces and we had to go there and mortgage our house and everything that we owned. Internally we knew we were confident that yes we will pay it back, but, when it really hits you and then you sign it, the enormity of the burden, you know. If it doesn't work, yes you can come to the street.

MEENA: It was difficult initial years to run with him and share the worries of running a business and having to meet the payroll on time and sign away everything that you own, including the house and all that, the properties. It was a tough choice, but we did it.

We did it together and I held on tight.

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