In response to the article, several of you reached out with questions of your own to add to the list. Not surprisingly, the questions largely focused on what is going on in the Houston economy right now as a result of the decline in oil prices. Here were your thoughts:
If you’re doing business in Houston you’ve likely felt (or will soon feel) the effects of the drop in oil prices. Even if you’re not in the energy sector, your banker wants to know that you’ve taken a look at how the economic situation may affect you.
What other trends are affecting your industry? Government regulation, increased competition, technology, substitution, etc.? Your banker wants to know what your plan is to deal with these trends whether it entails mitigating risks or exploiting a competitive advantage.
It’s important to your banker to know where you’re headed in the long-term. It’s easy to get wrapped up in the day-to-day operation of a business, but your banker wants to know that everyday decisions are made with the bigger picture in mind and not just reactions to the situation on the ground.
In the original article, I talked about the 5Cs of credit and how Character was the most important “C”. Based upon your comments, I’d have to say that Conditions may be of greater importance (or at least more immediate) to you in the current economic climate.
Thanks so much for your feedback! I’d love to hear what other questions you have.