Small Business Negotiation Strategies and Commercial Lenders

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There is possibly no better example of underutilized small business negotiation strategies than the general lack of solid negotiating practices when most business owners are working with commercial lenders. This observation is not only applicable for recent circumstances but also when looking at the past five decades or so. What has made the situation more actionable and critical for commercial borrowers is the chaotic economic climate that has resulted in a series of negative events for commercial banks and other lending sources. In short, a bad situation has been made worse because of complex factors such as shrinking bank assets, reduced sales activity and decreasing real estate values.

Whether analyzing small business communications in general or commercial lender negotiations in particular, any business owner will probably readily admit that they would like to be able to devote more efforts to improving both management functions. However as any manager must do constantly, time and financial resources need to be juggled and allocated according to a wide variety of practical considerations. It is unfortunately not as simple as realizing that there is a problem. Instead the problems will need to be prioritized, and small business solutions will be implemented in accordance with the realistic priorities that prevail for each unique situation.

Prioritizing and managing tasks and problems is realistically the first order of business for developing successful negotiation strategies to deal with commercial lenders. For example, it can be relatively pointless to assign the top priority to negotiating a new working capital management agreement with a bank (or other financing source) if that means other critical functions will be ignored for any substantial time period. When business owners begin to reflect about the delicate balance that prevails within each of their time management scenarios as part of a candid assessment of what to do first (and what can wait until last) and how much time to devote to any given activity, it often helps them to realize that they might indeed need some external help to get through their particular set of obstacles.

The prioritization process can also help point businesses in the right direction in the way that it generally illustrates just how unique management and financial problems are for each circumstance. The unmistakable (and transferable) lesson to be learned from that particular realization is that the most appropriate strategies for commercial lender negotiations will almost surely vary widely from one business situation to another. This lack of a constant formula for business lender negotiating will make the path to practical communications solutions more challenging because the realistic business negotiation strategies likely to be most successful in dealings with commercial lenders will need to be evaluated within the unique context of each borrower.

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