Here is a question I got recently:

"We want to get a reference letter from someone who loaned us money that we can show to another potential lender.  Would you give us some wording that we should have in a letter that would look good to other lenders?"

Obviously, it’s critical to have many different sources of financing lined up.  You never know when you’ll find a home-run deal that requires money you don’t have to purchase. 

On the one hand, you can have this money lined up in advance so you can take advantage of home-run deals when they come up.  One the other hand, you can just sort of go with the flow and try to get financing lined up when you need it.  MISTAKE!!!

Trust is the name of the game when it comes to getting in with a new lender.  The more good looking paperwork you can show to a potential lender, the better chance you will have in gaining their trust.  When I say paperwork I mean financial statement, references, assets, etc. 

So here is the step-by-step approach that I like to take when approaching a new lender:

1) Get your financials together.  Make sure they are up-to date.  These better include a balance sheet, a profit and loss, and a schedule of loans.  You will also need to provide them with recent tax returns. 

2) Have current reference letters from people in whom you have made good on loans in the past.  Here is where your questions comes into play.  Have that lender put down specific information about the loans you have with them, such as the numbers of loans, the balances, and your pay history.  I’m assuming that they will have good things to say about you.  If you are consistently 2 months behind in your payments, you better skip this one. 

It would also be good if they said something to the effect that they would extend credit to you in the future if asked. 

If you can provide reference from multiple sources, all the better.  I like to include a number of differrent references, from other bankers you do business with, your attorney, title company, etc. 

3) Meet with this lender in person.  Find out where they are at with you. 

It’s important to be proactive.  Don’t wait until you need the money.  Get out there and talk to some new lenders today.