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Finance Negotiation Strategies

Updated on March 10, 2016
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Stephen Bush is the founder and CEO of AEX Commercial Financing Group. Steve obtained his MBA from UCLA and is a U.S. Navy veteran.

Business Finance Negotiation Strategies
Business Finance Negotiation Strategies

Business Finance Negotiating Help

For some small businesses, negotiating is often treated as a weak variation of public relations and promoting. Unsurprisingly in such cases the result is likely to be something less than a negotiation strategy. On the other hand, the use of effective finance negotiation strategies is generally recognized as important by most business owners.

In actual practice, small businesses in particular often feel like they are talking to a brick wall when they attempt to negotiate with their bank, utilities, suppliers and business partners. When this happens (as it often does), it is only natural for strategic goals and plans involving the negotiating process to be assigned a lower priority or ignored altogether. This tendency should be actively avoided, and having specific negotiating strategies in place will act as a prudent reminder.

Business Negotiating
Business Negotiating
Business Lender Help
Business Lender Help

A Business Negotiating Example

Avoiding Full Sticker Price

Bank financing and services take many shapes, but a common thread is the presence of a variety of fees. I do think that it is reasonable for banks to make a (reasonable) profit from their commercial activities. But more often than not, these are negotiable charges. Because many of the fees can be viewed as excessive as they are originally quoted, the bank is likely to be left with a reasonable profit after agreeing to negotiate to a reduced amount.

If a business owner chooses not to exert any efforts at applying even minimal finance negotiation strategies when finalizing bank business loan agreements, the financial result will be similar to paying "full sticker price" (or worse) when buying a car. Automobile dealers are generally not known to offer a lower price than they have to, and it should be realized at an early point that bankers are also likely to have a "sticker price" that will be happily charged to unsuspecting commercial borrowers.

The negotiating strategy to be adopted by business owners from this perspective can be referred to as "avoid paying full sticker price for anything." No matter whether the negotiation session is with a bank or a utility or a supplier or a lawyer or a CPA, they will typically have some variation of a "full sticker price" for their products and services. Unfortunately, most banks are experiencing such a significant loss of revenue due to their recent operating mistakes that their starting point can be even higher than you might imagine was even possible.

When this happens, even what appears to be a generous fee reduction can leave a business borrower still paying too much. Of course this undesired outcome can also occur with other providers such as utilities and suppliers. Because there can be some uncertainty in knowing what outcome is realistically possible, there will eventually need to be a judgment call about when to stop negotiations.

Do you know what should be negotiated?

Is everything really negotiable?

Must Reading for Improving Negotiation Strategies

Shut Up and Say Something: Business Communication Strategies to Overcome Challenges and Influence Listeners
Shut Up and Say Something: Business Communication Strategies to Overcome Challenges and Influence Listeners

There are very few business books that have even attempted to address this topic, and Karen Friedman has hit several home runs. Whether you want help to improve business communications or communicating in any other context, please don't overlook her exceptional book.

Negotiating (when used properly) has a realistic potential to provide immediate and critical help in solving a number of serious financial problems such as those noted below. The rapid and extensive changes in economic conditions have made it virtually mandatory for companies to cut costs wherever they can. For most small businesses and manufacturers, the expense items below are an excellent starting point for any serious effort at cost cutting that will make a real contribution to the financial survival and future growth of a company. This is simply the beginning of how companies can save some real money, and there are more realistic opportunities just waiting in the wings.


  1. Utility costs
  2. Commercial mortgage loans and business financing in all forms
  3. Supplier agreements and manufacturing costs
  4. Credit card processing fees

Karen Friedman has written a superb book (noted above) that will help with communicating and negotiating.

Business Loan Questions
Business Loan Questions

A Key Question and Answer

It seems like it is highly desirable to know what negotiating result is actually reasonable before beginning the whole process. What is the practical business solution for reducing business loan fees in a cost-effective way?

The best analogy might be the common wisdom that a trial attorney tries to avoid asking witnesses any question that they (the lawyer) don't already know the answer to, thus avoiding surprises that might impact their case negatively. To find the practical and cost-effective business solution for a similar approach with business finance negotiations, it is helpful to first know who and what to avoid.

The financial institutions that created the current financial crisis are not likely to be the most appropriate source for fixing the problem. Likewise individuals who get paid based on what fees they charge a business owner are not likely to be the most appropriate source for helping small businesses to reduce the fee structure.

What is ultimately needed is an objective intermediary who is aware of what constitutes "full sticker price" for the commercial financing services being evaluated.

A Poll - Your Opinion About Time Spent

Is negotiating a waste of time? Does the success depend on the parties involved? What are the benefits? Those are all excellent questions. The poll below is limited to a straightforward opinion about whether individuals and business owners should devote more time to negotiation strategies than they do currently.

Agree or disagree? Individuals and business owners should spend more time negotiating with bankers, utilities, business partners and suppliers.

See results

The value of effective business writing is the most overlooked aspect of negotiating.

The New How: Creating Business Solutions Through Collaborative Strategy
The New How: Creating Business Solutions Through Collaborative Strategy

Collaborating is overlooked as much as negotiating, and this superb strategy book will show you why and how to correct this oversight.

Is Business Training the Answer?

I encounter individuals and small business owners every day who hate negotiating. Even when someone has the skills to do something, it is natural and easy to avoid it if it is an activity that you don't like doing.

Guess who does like negotiations? Banks and bankers are at the top of the list, but they are not the only examples. The banking industry has observed the exceptional profit potential to be realized by doing at least an average job of negotiating. They might not be good at it, but they like it and are always prepared to do it. Are you prepared to negotiate with your bank? Probably not, and very few small businesses and individuals are.

What is the solution to this dilemma? After all, you should realize as your banker already has that you also can make substantial profits by being prepared to do this. As noted above, the potential areas for your company to benefit by getting better at this extend well beyond banks to include suppliers and customers (among others).

You can learn how to do this! One of the most effective strategies involves business training for appropriate company personnel. This might be one person or several.


Here is a short video featuring Nilofer Merchant, author of "The New How."

Why Negotiate?
Why Negotiate?

Practical and Successful Strategies - Roger Dawson

Secrets of Power Negotiating, 15th Anniversary Edition: Inside Secrets from a Master Negotiator
Secrets of Power Negotiating, 15th Anniversary Edition: Inside Secrets from a Master Negotiator

This is an updated treatment of practical and effective negotiation strategies. You should read this several times if you are serious about improving your negotiating skills.

If a small business owner makes the conscious choice to employ negotiating whenever feasible, it might turn out to be the most prudent and strategic decision they will ever make. As noted above, I identified some primary candidates (for using negotiation strategies) that have the potential to produce critical and timely reductions in business operating expenses. With an economic environment that continues to provide only periodic glimpses of growth, small businesses cannot afford to overlook such opportunities to reduce costs.


Never cut what you can untie.

— Joseph Joubert
Thanks for Visiting Finance Negotiation Strategies -- All images provided under End User License Agreement to Stephen Bush
Thanks for Visiting Finance Negotiation Strategies -- All images provided under End User License Agreement to Stephen Bush

© 2012 Stephen Bush

And now, your thoughts on the subject...

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    • profile image

      anonymous 4 years ago

      Negotiations are such an important part of any deal and it is always good if one can get help from sources that are known for their expertise.

    • Heidi Vincent profile image

      Heidi Vincent 4 years ago from GRENADA

      Good negotiating advice and strategies.

    • ajgodinho profile image

      Anthony Godinho 4 years ago from Ontario, Canada

      Useful lens for small businesses in terms of negotiating prices for services. Nowadays with much more competition, it's a good idea to take the time to weigh one's options with various competitors. This can further help in the negotiation process.

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