Can an experienced manager, with good lending skills, really make a difference?
Yes. Banks always try to lend money safely, and rely on various means to do this. One of the most well known is to have another, more senior manager – at ‘Head Office’ or in a centralised credit department – sign-off on each borrowing application. These senior managers are the real decision makers. Banks know who their better lending managers are, so this sign-off procedure allows them to compensate for their weaker managers by changing the terms on which money is lent. They can do this by cutting back on the amount, by calling for more security, or by imposing tougher conditions. A lending manager’s standing can even make the difference between finance being granted or declined. An added difficulty for borrowers is that the problem is often clouded by the personalities involved: most bankers are personable people, so it is easy for borrowers to fall into the trap of assuming that they are dealing with the right lender, and that the terms they have been given are competitive.
