Wednesday, September 5, 1934
Daily Ncbraskan
Page 5
ierrey . . .
Continued ftroa 4
A personal deposit. Banks almost
never finance any enterprise 100 percent,
especially new businesses.
"We expect sons down-payment on
the building or equipment," the officer
said. "We don't want to run any busi
nesses, and If the bank financed someone
100 percent, that's what we'd bs doing."
A 30 percent contribution is a rule of
thumb for most Lincoln banks.
Research. When existing businesses
want to expand or new businesses locate
In Lincoln, loan officers expect to see pro
fessional research done on expected
profits. Who are the expected customers?
Where do they come from? What's their
economic background? How much com
petition Is there In the area?
Financial history often requires a pro
fessional accountant. Collateral and per
sonal downpayments mean capital. Re
search takes money.
Expanding or starting a new business
takes a lot of money, even while still on
paper. And that's why Kerrey worries
about affordable financing for small bus
inessmen. Large corporations have the
money of many businesses behind each
new enterprise. Joe down the block has
his house, his car, his savings for the kids'
college education.
"Not everyone knows how to make
money," Kerrey said. "Banks need to make
sure those people don't get loans. If you
think the risk of going broke is the grea
test risk, you're wrong.
"The greatest risk is if you work 40
years and you end up with nothing."
Kerrey suggested that the federal govern
ment needs to take a bigger role, even
when it requires subsidizing the local bus
inessmen. And he said he thinks the state
should do what it can tax-exempt
financing being just one example.
But financing isn't everything. Kerrey
said small businessmen need to be edu
cated, formally and informally. Formally
so they know how to use computers to
survive. Formally so they become aware
of the impact local, state and national
and world events has on their businesses
and markets.
But informal education is important,
too.
"A good businessman ha3 to have values,
ethics. He knows how to worts k willing to
work and has a sense cf humor," Kerrey
said. "He makes sacrifices. He has faith."
Kerrey's Omaha restaurant was blown
to bits in a tornado in May 1975. He said
that afternoon was "certainly not one of
the high points of his life."
"That's when you need a sense of humor
and faith," Kerrey said. "It's those times
when you stand alone."
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