Tips & Traps From Ron’s Book, Getting To Yes With Your Banker

There are certain things your banker isn’t going to tell you.  For the January issue, we are concluding the tips and traps from the article in the October issue of the Recyclers POWER SOURCE.  Hopefully, these tips and traps will save you time, money and headaches down the road.

Tip No. 19 -Choose the Legal Entity to Maximize Tax Benefits and Minimize Costs

Make sure you get legal and tax advice on this one, but one tactic I used was to place real estate title in a single member LLC. I was doing a 1031 tax deferred transaction, but I believe you can do this in most any case. It must be a single member LLC, however. You can then sell or convey the entity to another party without getting a new title policy, as the title policy belongs to the entity. If you put it in your name personally, the coverage is lost when the property is conveyed.

Tip No. 20 – Use the 10 Percent Rule

Most lenders won’t tell you unless you ask. But they have a 10 percent rule. This is fairly simple, most banks can loan you 10 percent of what you already owe without a formal approval process. Now don’t misunderstand me, the loan still has to be underwritten and viable, and all the fundamentals in place, but using this can save time and in some cases, money. You, of course, must be in good standing and have a good relationship with the officer. An example? You have a $100,000 line of credit, and a $350,000 real estate loan and $100,000 in truck loans, so total debt is $550,000. If your need is reasonable, you can usually get your line of credit raised by up to $55,000 without a formal request process. This is subject to your loan officer’s authority, of course, and subject to the legal lending limit of the bank, among other things, but don’t be afraid to ask.

As important as the information in these past articles may be, it’s only part of a much bigger picture. Success as a businessperson — regardless of field — depends on many components and learning how all the moving parts fit together can make the difference between success and failure.

Although throughout these tips and traps, Ron and Greg have similar values, their backgrounds couldn’t be more dissimilar. Greg has a BBA from Southern Methodist University and holds an MBA from Texas Christian University; Ron found himself living on his own as a teenager after his father’s death and is largely self-educated. As different as these two men are, both have earned success in their fields through hard work, a laser-sharp focus on their goals and the desire to constantly improve their skills and knowledge.

Their approaches are as different as their backgrounds, but both have plenty to say about building a successful business.

Remember only you can make business great!

Ron Sturgeon, founder of Mr. Mission Possible small business consulting, combines over 35 years of entrepreneurship with an extensive resume in consulting, speaking, and business writing, with six books published. While still in high school, Ron started an auto repair business that evolved into a single employee salvage yard. When he sold it to Ford in 1999, it had become one of the largest auto salvage operations in the United States. Later, he and two partners purchased Greenleaf Auto Recyclers from Ford and sold it to Schnitzer Industries 18 months later. As a consultant, Ron shares his 35 years of expertise in strategic planning, capitalization, compensation, growing market share in his signature plain-spoken style, providing field-proven, high-profit best practices well ahead of the curve. Ron has helped owners in industries from restaurants to law firms with a wide variety of business issues, including sales, promotion, production, financial measures, business strategy, business valuation and succession planning.

To get a free website review or inquire about engaging Ron as a consultant,

contact him at 817-834-3625 or at