Welcome to The BDO Show! A podcast for passionate BDOs wanting to level up their game with advice and stories from battle-tested BDO’s.

In this episode, we're talking about lies, deceit, and deception, you know -- that thing SOME BDOs use when selling a deal. Misleading borrowers can be largely categorized into two types: intentional and unintentional.

As Sterling Birdsong rightly points out, often, misleading a borrower stems from ignorance rather than deliberate deceit.

 New BDOs may unintentionally mislead because they lack experience with the intricacies of SBA regulations. For example, misunderstanding the necessity for an SBA loan to go through GP if in second position can lead to incorrect assurances to the borrower about streamlined PLP (Preferred Lenders Program) processing.

Ryan Kroge elaborates on another common pitfall: "I've said this once, I think, on the show, and I'll say it again, commission killed the salesperson. The majority of them out there are no longer looking out for the customer."

BDOs driven by commission rather than customer service might prioritize their earnings over the borrower's best interest, leading to ethical dilemmas. Whether through ignorance or intentional omission, misleading borrowers damages trust and can derail the loan process. Setting realistic expectations is paramount not only for gaining a borrower's trust but also for ensuring a smooth loan processing journey.

Chris Hackney emphasizes the vital role of managing expectations: "If you can't manage the expectations of your borrower and the process, then you don't need to be doing this job."

Similarly, Alan Peterson stresses the value of real-talk with borrowers about their obligations and responsibilities, particularly with evaluating business acquisition opportunities: "It's knowing what you can do and knowing what you cannot do that makes you valuable... level expectations with people personally... this is heavy stuff. This is heavy lifting.”

Did we miss anything? If you have questions or comments, please send them to [email protected]  ______________________________________________________

This episode is sponsored by: Rapid Business Plans

Rapid Business Plans is the go-to provider of business plans and feasibility studies for government guaranteed small business lenders. For more information, or to set up a Get Acquainted call go to Art of SBA — Rapid Business Plans ______________________________________________________

CHAPTERS

0:00 | Introduction

3:34 | Ethical Dilemmas in SBA Lending Practices

6:41 | Navigating Early Mistakes and Learning Curves in BDO Roles

11:31 | Navigating SBA Loan Policies and Bank-Specific Rules

17:22 | Managing Expectations in Banking and Mortgage Processing

21:16 | The Consequences of Misleading Borrowers in Lending Practices

26:10 | The Importance of Transparency in Business Acquisitions

32:17 | The Realities and Expectations of Buying and Operating a Business

33:03 | Red Flags When Discussing Loan Terms With Lenders