Category Archives: Canadian Commercial Lenders

Sales Thought – Before The Cold Sets In

by Nick Miller of Clarity Advantage

In which we are reminded to engage our clients on what’s top of mind for them right now rather than on what’s top of mind for us.

I live near Boston, Massachusetts.  The Red Sox are finished.  Winter is coming.  Around the Miller household, we are preparing our house and garden for the winter.  Storm windows hung up, hosta cut down, lime and fertilizer spread around. Early days, still, and we’re working our way through the list, week by week, toward the inevitable arrival of sharply colder temperatures and snow.

As a business owner, I’m feeling like I’m in the same position now – another economic winter is coming, and I need to prepare.

The news coming out of the Eurozone ranges from “not encouraging” on a good day to “frightening” on other days.  U.S. and foreign stock market heaves and rolls leave me sea sick as my investment values bounce up and down, almost carelessly. The political and regulatory environment in this country leaves me shaking my head.  Our clients’ outlooks for 2012 range from guarded optimism to bracing for a crash.

What is the current status regarding commercial lending practices in Canada as we are heading into the month of October, 2011? Is it business as usual or ???

John Eric Pollabauer posted this question to the Canadian Commercial Lenders group on LinkedIn:

“What is the current status regarding commercial lending practices in Canada as we are heading into the month of October, 2011? Is it business as usual or ???”

For myself [EG], account managers from two financial institutions tell me that at the same time as they are being pushed to produce, credit is being very difficult on each deal. The result is a lot of resulting stress and unhappiness.

I believe it helps everyone when we share our experiences with others. Please enter your comments below. I will then publish them for you, but omit your name and institution, unless you wish otherwise.

Retractable Shares: The Unexpected Creditor

By Richard Dusome of Gowling Lafleur Henderson LLP

When structuring a new financing for a corporate borrower, lenders typically obtain postponements from all other creditors and shareholders advancing loans to the proposed borrower.  Postponements establish the lender’s priority to receive payment from the borrower vis-à-vis these other known creditors.

However, some shareholders who have not actually advanced loans to the borrower may still hold shares that contain a right of retraction that will require the borrower, at the shareholder’s option,  to purchase the retractable shares at a pre-arranged price following the issuance of an exercise notice.  The retraction serves to create a new debt obligation out of what was originally an equity holding.

Guarantor Waivers of PPSA Rights in British Columbia

By Mike Todd of Gowling Lafleur Henderson LLP

Lenders should be aware that one of the waivers found in most standard form guarantees of certain statutory rights is not effective under the British Columbia Personal Property Security Act (“BCPPSA”).

This was the result in the recent BC Supreme Court decision HSBC Bank Canada v. Kupritz. The facts of that case are unremarkable. A trucking company went out of business leaving an unpaid debt to the bank of approximately $1 million. The bank was unable to recover that amount from the company’s assets and therefore sued the two principals of the company on their unlimited guarantees. One of the principals defended the claim on the basis that the bank had breached its obligations to him under the BCPPSA by failing to secure the company’s assets, improvidently realizing on the collateral seized, failing to provide notice of the impending sale of the collateral and failing to provide an accounting.

Banks Have Right To Hold Tight In Paying Cheques – Ontario Court holds that banks need not bear the risks of cheques being dishonored

By Lisa Brost and Jeffrey Levine of McMillan LLP

Generally speaking, banks’ customers have no immediate right to the proceeds of the cheques that they deposit. Under the terms of most banking services agreements, banks can place holds on cheques deposited by their clients for a reasonable period of time. Further, even if a hold is not put on a cheque, any advance of credit by a bank on deposit of a cheque is usually provisional in nature. The cheque may still be returned, or dishonoured, by the bank on which the cheque is drawn, leaving the bank that provided provisional credit in respect of the cheque with recourse to recover such amount from its client.

These guiding principles of the cheque payment process were recently considered by the Ontario Superior Court of Justice in Re*Collections Inc v The Toronto-Dominion Bank.1 The plaintiffs in this action moved to certify a class action against three of Canada’s six major banks (the “Banks”). In the proposed class action, the plaintiffs sought to recover profits that the Banks allegedly earned at their customers’ expense through use of the proceeds of held cheques between the time that cheques were deposited by their customers and the time that the proceeds of the cheques were made available to the customers.

Sales Thought – An Early Lesson

by Nick Miller of Clarity Advantage

In which we are reminded to focus first on relationship and value demonstration, then on the commissionable task.

On a spring afternoon long decades ago, we sat almost knee to knee in a hotel lobby after a sales and marketing conference we’d both attended. She, leaning back, almost lounging, on a hotel lobby couch. I, sitting on the edge of an arm chair, facing her, leaning forward. She reached into her purse, fished around, and pulled out a pencil.

“Sell me this.” Her eyes barely moved.

I looked at the pencil. It was a standard yellow wood #2 pencil that, in her hand, looked as big as a shovel.

“Come on,” she purred, extending her pencil-bearing hand toward me. “Sell me this pencil. It can be anything you want.”

The Ideal Business Banking Account Manager

Here are a few characteristics of the ideal banking account manager for a business, based on feedback from the businesses I work with:

  • Returns your calls promptly
  • Answers your questions with clarity and authority
  • Always has time to consult with you about your needs and performance
  • Suggests techniques for innovative loan structuring

Sales Thought – Home Ice

by Nick Miller of Clarity Advantage

In which we are reminded that, to win in a competitive situation, we need to build our fan base inside our prospects’ organizations well before we make our move to sell.

The Boston Bruins (National Hockey League defending Stanley Cup champions this year) began their training camp last Friday.  The seventh (final) game of their 2011 Stanley Cup series against the Vancouver Canucks was electrifying hockey, whether one was rooting Bruins or Canucks, and Boston’s win at the end was a surprise because… .through the first six games, each team had won on its home ice,  the seventh was game was played in Vancouver, and, in the National Hockey League, home teams win 59% of the time. Home ice advantage.  Fifty-nine percent!

Shocked?  Well hang on. If you’re a National Basketball Association fan, home teams win 62.7% of the time.  Almost TWO THIRDS of the games are won by home teams.  Home court advantage. And it’s about the same in the WNBA as well. Amazing, eh?

Sales Thought – Matted Down

by Nick Miller of Clarity Advantage

In which we are reminded to follow our “broad” questions with very specific questions that tease out the detailed facts we need to propose value-based solutions.

With apologies to y’all in Texas and other states who haven’t had rain or grass for a couple of years:

I mowed our  lawn on Saturday. Beautiful day for mowing, just a little bit of cool fall air with brilliant September sunshine.   Thanks to recent rains and the fall dose of lime and fertilizer, our lawn is thickly green, punctuated with early fall leaves.

One small hitch in the giddy-up.  The ride-on lawn mower we use for grass and leaves at this time of year features wide front and rear tires that matt down the grass so that the mower blades ride over the matted grass which can get pretty long, even when we’re mowing weekly. So, after we mow, we rake portions of the grass, teasing up the matted down long bits so that we can clip them with hand-clippers or mow them with the standard rotary mower.

Sales Thought – Totally Concrete

by Nick Miller of Clarity Advantage

In which we are reminded to clarify terms we don’t understand before presenting ideas.

One person’s golf is another person’s word play – meaning, I love a good pun as much as my golfing friends love a good drive or putt.  I love rough puns a lot more than my friends enjoy hitting balls into the tall grass.

Anyhoo, a couple of weeks ago, during the “warming up” stage of a conference call, a few of us on the line began fooling around with puns and plays on words we remembered hearing from our elementary school children.

One of the group offered:

Two fish swim into a concrete wall. The one turns to the other and says, “Dam!”

The folks on the line guffawed appropriately.

Another offered:

Sales Thought – Old Habits

by Nick Miller of Clarity Advantage

In which we are encouraged to ask others to help us identify and correct old habits that hold us back.

From the “I can’t believe I’m going to tell you this story and you probably won’t either and there won’t be many secrets left after I tell you this one” department: for several decades, I have had a problem eating. Actually, I haven’t had a problem “eating,” as in chewing, swallowing, and enjoying the multiple benefits of a balanced diet. I had a problem getting food into my mouth reliably. (I can see my spouse and children rolling their eyes now.)

Sales Thought – Simple, Neat, and Incomplete

by Nick Miller of Clarity Advantage

In which we are reminded to step back and look for the broader picture before we pitch solution for the problem we’ve just heard.

Watching classroom sales training role-plays is a little like watching football teams practice without pads…  Low intensity.  Move through the motions.  Nobody trying too hard to take anyone else out.  Still, an observer can get a general sense of the team.  Essential tendencies shine through.

So, as I was watching and coaching this particular set of “pad-free practice role-plays,” I saw an essential tendency.  As the “sellers” in the role plays heard a bit of information that suggested a potential need for a product, they would say, almost reflexively, “if I could show you a way to…”  or “we have a product that would help you….”

No success without access

By Harvey Mackay

Over the years I’ve asked a lot of people what makes a great salesperson, and the answers are fairly predictable:  passion; persistence; personality/likeability; planning; trustworthiness; strong work ethic; drive/initiative; quick learner; goal-oriented; good communications skills; sense of humor; humility; good timing; strong at building relationships; and follow-up (or as I say, the sale begins when the customer says yes).

My own answer is always the same:

Sales Thought – The Quality of the Question

by Nick Miller of Clarity Advantage

In which we are reminded that the value we create in our sales conversations is proportional to the quality of the questions we ask and whose interests we are attempting to serve by asking them.

This is a story about a sales call. A  very experienced, productive (among the top 25% of his sales force) commercial banker took me on a call to one of his customers.  Since rates are low and many banks are urgently seeking to lend money, the lender wanted to refinance the company’s building which, today, is financed by another bank.  The objective of the call was to gain the company’s agreement to consider a proposal for refinancing the building.

The lender opened the call by indicating he wanted to discuss refinancing the building,  then worked through a series of “fact” questions (how much is outstanding on the existing loan, when is the maturity date of the current loan, how big is the balloon payment at the end, what’s your current interest rate, who’s your attorney, when  do you want to close), then led the conversation as follows:

Canadian Public Company Fined $9.5 Million For Bribery – Most Severe Penalty Handed Out Under Canada’s Anti-Corruption Laws – Who’s Next?

by Fred R. Pletcher, Samir Patel, and D. Ross McGowan of Borden Ladner Gervais LLP

Canadian companies face many dilemmas working abroad. Canadian domestic ethical standards can be challenged by foreign regulatory impediments, “local customs” and expectations of foreign officials. The temptation to improperly facilitate a transaction can lead to a path of bribery, multi-jurisdictional criminal and civil proceedings, fines, forfeiture of assets, reputational damage and, potentially even, imprisonment.

INDICTED AND GUILTY PLEA

Indicted for bribery on June 23, 2011 under Canada’s Corruption of Foreign Public Officials Act (the Foreign Corruption Act ), Niko Resources Ltd. (Niko), a Calgary-based oil and natural gas company, pleaded guilty to the bribery charge in an agreed statement of facts filed with the Alberta Court of Queen’s Bench on June 24, 2011.