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How to Ask for a Loan
KEY WORDS: IN ASKING FOR A LOAN, PLACE EMPHASIS UPON YOUR SECURITY OR ABILITY TO
You sometimes have occasion to borrow money. Think out the best way of asking for a loan.
As a first step please answer this question: Why should anyone lend money?
On the answer to that question depends the kind of speech you should use in asking for a loan.
One reason is the business reason. What is it?
One reason is the personal reason. What is it?
The business reason is, frankly, a desire to make money by means of interest. A loan is an investment. An investment demands security.
If you borrow money in a business way, your speech is easily made.
"I wish to borrow three hundred dollars." There is the fact, stated immediately.
Follow that, at once, by an offer of security.
"Here is a $500 bond of the U. S. Steel Corporation as security. I will give you my note and proxy, deposit the bond with you, and take your receipt."
That is all there is to the matter. *
1. Make a definite request immediately.
2. Name the security and its value.
3. Offer, your note, proxy, and security, and ask for a receipt for the security.
The proxy, you understand, is a paper giving the lender the right to act for you in disposing of the security in case of need.
The method outlined will apply when you deal with banks, or with individuals in a purely business way.
Now consider a loan for personal reasons.
Is the object to make money? Certainly not. The object is friendship, pure and simple.
Of whom, then, should you ask personal loans?
Of course, only from your closest friends. To go to anyone else is to expose yourself to humiliation and failure.
Do your friends expect a return of their money?
You know they do. You should guarantee that return by some form of security.
That security will be a definite and well-founded understanding.
Speak like this:
"I draw my salary on the fifteenth, two weeks from now. I wish to give you my note, payable on the sixteenth."
Or else say: "I have been at unusual expense lately. In six months I shall be able to pay you back. You know what my business is doing now. I will give you my note for six months, but I should like the privilege of extending it then for another six months."
Thus, even in the personal loan, give a kind of security, in the shape of a full explanation of your circumstances, and insist upon a note.
1. Make a definite request immediately.
2. Explain your circumstances sufficiently to show that you can repay the loan.
3. Insist upon presenting ycur note.
The personal loan is, of course, a distinguished favor. Express your appreciation in warm terms.
1. Go through the steps of asking for a business loan.
2. Go through the steps of asking for a personal loan.
How to Ask for Extensions
KEY WORDS: IN ASKING FOR EXTENSIONS EMPHASIZE THE PRESENT VALUE OF YOUR SECURITIES, OR PROVE YOUR ABILITY TO REPAY.
It sometimes happens that you are not able to repay a loan on the date agreed upon.
You must ask for an extension of time.
What will you say?
One of the general principles of effective speech is:
"Put yourself in the other man's place."
Think, now—what speech would be effective with you?
If the loan is a business loan you would be glad to extend the time, if you knew that the security was still good, and if you could have a renewal of the papers.
Here is your rule, then:
1. Ask immediately for an extension.
2. Give evidence that the security is still good.
3. Offer to renew all the papers.
Suppose that the extension is not for a loan but for a purchase. You have bought goods on credit. You agreed to pay on a certain date. You now find it inconvenient to pay.
Once more, put yourself in the other man's place.
If the matter is purely business, change the charge account into a loan.
1. Ask to have the account considered as a loan.
2. Offer securities, or show your ability to pay.
3. Offer your note, etc.
If the extension is for a personal loan, you owe it to your friend to clear up the entire situation.
1. Ask for a definite extension.
2. Give your friend reasons with which he will sympathize.
3. Give a renewed explanation that will show your ability to pay in the future.
4. Insist upon renewing your note.
PROBLEM. Your business has been running at a loss. You believe it will renew its former success. You are not able to repay various loans. Think out requests for extensions of:
1. Business loans.
2. Personal loans.