“Ethics is knowing the difference between what you have a right to do and what is right to do.” (Potter Stewart)
There are many ways to conduct business. Some make more money than others, but that should not be your only goal. You need to remain in business. As Warren Buffet says “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.”
Here are some of the more important rules, at least from my perspective, that you should abide by if you want to succeed and stay successful in the commercial finance industry.
- Treat people the way you want to be treated, in business, and otherwise. (sound familiar?)
- If you are a broker, disclose everything you know about a transaction to your funder, and everything you are legally required to disclose to your client. Adhere to the state licensing and disclosure laws.
- Never circumvent a broker, whether you’re a funder or a borrower/lessee. It may or may not be specifically prohibited by your contract, but it is still illegal in every state, and you can be sued for it under tort law, contract law, or both.
- If you are a broker, do not re-broker deals or split broker commissions without the knowledge and consent of both your borrower and your lender.
- Do not make representations that are inaccurate, beyond the scope of your knowledge, or contrary to the contract and addenda.
- Stay informed. The finance industry, particularly the tech aspect, changes frequently. If you don’t keep up with the new developments, you will fall behind and miss opportunities.
- Offer help to others as needed, especially the newcomers to the industry. If you’re new, find a mentor. If you’re a wizened old pro, find a mentee.
- Join an association, or two. Take an active role, as a committee member, board member, or otherwise. Stay active, and get to know the emeriti, who may prove invaluable resources for your professional development.
- Have a good team of professionals at the ready, i.e., bookkeepers, tax advisors, attorneys, accountants, who are available to ensure that you maintain compliance with the myriad laws and regulations that govern the commercial finance business.
- Give back. If you are doing well, share your knowledge, or more importantly your wisdom. In case you don’t know understand the distinction, the difference between knowledge and wisdom is that knowledge is awareness that a tomato is a fruit; wisdom is knowing not to put one in your fruit salad. Share your experiences and your wisdom. It’s the gift that keeps on giving.
I’m sure you can think of many other ways to foster your success and nurture and maintain your reputation, but ten is a nice number, so let’s stop there for now!
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