BORROWING: HONOUR THE GOLDEN RULE

By Nnabugwu Chizoba

Dear All, entrepreneurs and start-ups in particular,

Are you in need of money for business? Do you want to borrow?
 

Wait a minute. Do I understand it well? You mean your business is in need of money and you want to raise it from another business? Isn’t this amazing, interesting and noble? But let’s get it right.

The money that your business wants to borrow, may also be needed by other businesses, right or wrong? It is also possible that someone or an organization offers lending services as a business. You do know what this entails, no doubt. 

Let us assume that the lending services is not conducted as a business, but the lender gives out money to people so they can grow their business, in which case collects no interest. Can we reason that such money is necessary, critical and vital for the successful conduct of the lender’s activities, even for his/her personal needs? Nobody ever has enough, mind you! 

Come to think of it, if we consider that the said lender derives joy from lending to people, we can as well reason that he/she may want the lending hand extended to other people, who no doubt need money like you. In this regard sustainability and continuity of the exercise are very paramount. 

The above is a pointer to the fact that there is every reason for adequate measures and procedures to be in place to ensure that the borrowed money is not just secure but repaid in full when due. The same holds true in the event that the lender conducts the lending activities as a business. Some measure of control, strict adherence and diligent execution of the terms of the loan are expected to ensure that the principal, (actual money collected) and the interest are recovered in line with the lending agreement.

What I don’t seem to understand therefore, is the mindset and attitude of borrowers, which more often than not suggest that lenders are selfish, unnecessarily strict and difficult. Na waoooo!

That brings me to our topic: Borrowing: Honour the Golden Rule. What I want to say here is very simple: They that have the Gold, make the rules. The idea here is to put us in the frame of mind that is not only necessary but appropriate for us to learn, recognize and adhere to the dynamics and vagaries of loans and borrowings. A realistic attitude enhances your chances of success when handling loan issues.

When going for loan, prepare to provide wide range of information, as well as open up to answer various degrees of questions, sometimes considered repetitive and tedious, trivialized and unnecessarily probing and provoking, as claimed by the loan seekers. You too must be prepared to ask as many questions as you wish and demand for better explanation of anything you did not understand. If you think external input is what you need, take your time and go for it. 

Please note: 

Processes involved in loan administration are not personal in intent. They are systemic, structured and justified procedures to establish and protect the risk of the lender. They are never targeted at you.
My charge to you: rather than behave awkward and sometimes sound irritating as if it is the lender that pushed you into the financial predicament you find yourself, I suggest you embrace the lender as a patient would, a doctor trying to render assistance in a critical situation. 

In addition to the above: 

Always bear in mind that lenders receive several applications and requests for loans. The hope of all loan applicants is to obtain the loan, even when all may not have what is required to repay the loan. 

Know also that lenders do not have the capacity to decipher by merely looking at the documents, who will default. The only option therefore, is to scrutinize in detail each request, in terms of ability to repay the principal and the interest where applicable. Here lies the lenders dilemma and their success as well.