“Interesting,” Brandy replied. “In fact, awesome! I’ve not ever heard of a business like that.”
She continued. “So, what kind of market is there?”
“Well,” Bill replied, “There’re two primary markets – collectors’ pieces, and legal tender coins for other countries.” He paused and looked into her eyes. “Collectors’ pieces are a specialty market with high margins. On the other hand, minting legal tender is more of a mass-production market – it comes with higher sales volumes but smaller profit margins.” He paused to hand over a document. “This is a copy of my business plan. There's a full discussion of market potential along with other analysis.”
Brandy looked at the thickness of the document. “So, I'm sure that all of your costs are outlined here. How big a loan do you want?”
“I'm projecting equipment costs of about $450,000,” Bill replied. “I’d like a loan for $360,000 – about 80% of the equipment costs – and I will cover the rest of it.”
Brandy frowned and then seemed to make a decision.
“Okay, Mr. Ford – ah, Bill. If you will fill out this application, I’ll see what I can do.”
“What are my chances?”
“I'd say they’re really good. We do business loans all the time. The big thing we look for is an asset that will secure the loan. Obviously, you will have such an asset.” Brandy paused and smiled. “We will, of course, go through your business plan. But if you’ve done your homework – and I’m betting that you have – then there will be no problem at all.”
Brandy’s face lit up with a warm smile. “I'll move on it as soon as you get me that application.”
* * *
That evening, Brandy sat down with a glass of wine and began reading through Bill’s business plan. She was quickly engrossed.
To negate the economies-of-scale advantage from larger competitors, this plan anticipates capital equipment costs of $450,000.
She read through the projected revenue sources and costs – they were clearly spelled out, and many other details were equally clear. This is a damn good plan, she thought.
She especially liked Bill’s discussion of risk mitigation. Bill had taken the time to detail the risks of a decline in gold and silver prices. But he went further and detailed the costs of managing these risks through the purchase of put options.
Brandy searched her memories from college. Simply, a put option gives the owner the right to sell a security (or a commodity) at a specified price, regardless of the price of the underlying commodity. This means that he’s covering the risk of a decline in gold/silver prices. Very smart, indeed.
Brandy finished her wine and packed it in for the night.
* * * * *
Another day at the Bank . . .
Brandy poured a cup of coffee and walked back to her desk. She sat down and perused her newest emails, quickly keying on a message from Marcus. The message referenced Bill’s loan. Curiously, Marcus had held up the loan application for a few days, and so Brandy now was planning to talk with Marcus. Maybe I won’t have to talk with him after all, she mused.
She opened up the email and read the text.
“Brandy, I have declined the loan as described by the attachment. Please come and see me so that we can talk about it.
- Marcus”
Brandy’s face turned red. She pulled up the attachment – a copy of the loan application. But she found no statement about the denial.
She breathed deeply and leaned back in her chair. Son of a bitch! And then, she let go of her tension, allowing it to flow out of her. She knew Marcus didn’t respond favorably to other peoples’ anger; and so she relaxed, bringing herself to a grounded, rational place.
Brandy walked down the hallway to Marcus’ open office door. Long ago, he had requested that she just walk in if his door was open – and so, she entered and sat down. She watched Marcus as he was finishing up a call. It sounded as though he was giving his broker instructions for a stock sale.
Marcus put down the phone and turned his attention to Brandy.
Brandy spoke. “About Bill Ford’s loan –”
“Oh, yes,” Marcus interrupted. “I wanted to talk with you about it. Thanks for coming down.”
Marcus leaned back in his chair; looking down at the pen he was fussing over. “I know that you recommended this loan highly. And given the quality of his business plan, I can surely understand why.”
Brandy sat quietly, watching him fuss with his pen.
“But,” Marcus looked up at her, “I had to run this by the loan approval board – both because of the loan amount, and because of the nature of his business –”
“Nature of his business?” Brandy interrupted. “What about his business?”
“Well, ah – it seems that some of the loan board members think that Mr. Ford’s business is more about investment than it is about minting coins,” Marcus replied. “They are especially concerned with his use of a loan to play in the gold and silver markets.”
“Huh?” Brandy was prepared for just about any excuse – except this. “What are you talking about?”
Marcus paused in his meticulous, tedious manner. “One of the loan board members produced Federal Reserve Notice 96-037. This rule states that the bank shall not fund a purchase, either directly or indirectly, of any gold and/or silver.”
Someone needs to shoot this bastard, she thought, even as she sat quietly listening.
“So,” replied Brandy, “is there any possibility that we can give Bill the loan?”
Marcus was back to fussing with his pen; even as the undercurrent of tension and anger raged between them.
“No,” Marcus replied, “there is no way we can loan him the money with this type of business.”
Brandy tried hard not to show her feelings. But somehow, her “thank you, Marcus” sounded much more like “fuck you, Marcus.” She got up and walked out.
That night, Brandy made a telephone call. “Bill? This is Brandy. Is this a good time to talk? No? Okay – can we meet somewhere? I’d like to talk with you about your loan.” She paused and then said, “No – not at the office. How about we meet for lunch at say – Roscoe’s? Is noon tomorrow okay? Great. I’ll see you then.”
* * *
Roscoe’s was established as an upscale restaurant in an upscale part of Scottsdale. Built on a miniature mesa, the restaurant had a north-facing unobstructed view of the McDowell mountain range. Besides the really great mountain views, the restaurant was quiet – an ideal place to talk business.
Brandy walked into the restaurant and up to the hostess’ podium. “I’m supposed to meet someone here. He's tall with wavy blond hair. His name is Bill.”
“Oh my,” the hostess giggled. “He sounds like someone I'd like to meet, too!” Then she became all business and grabbed a menu. “Please follow me.”
She led Brandy straight to Bill’s table. Brandy greeted him as she sat down.
“So,” Bill said, smiling, “to what do I owe the honor of a lunch meeting? Do you do this with all your clients?”
“No,” Brandy laughingly replied, “you’re my first.”
“So, what’s the word?” Bill asked.
“Well. In a nutshell, they turned down your loan application.”
Bill paused, his smile turning to a frown. “I thought you were sure this would go through?”
“I was,” Brandy replied, “I have seen a lot of these approved – and frankly, on much slimmer grounds than yours.”
“Did they give a reason?” Bill asked. He started stretching and massaging his fingers.
“They gave two reasons,” Brandy replied. “The first reason they cited was the loan amount. And the second reason was the nature of the business.”
Brandy paused and looked into Bill’s eyes. “The loan amount is bullshit – I’m sure of it. But their second reason – the nature of the business – is, I think, the real issue.”
“My business?” Bill was perplexed. “What about my busi
ness?”
“I’ve run across several loans that were easily qualified, but that were ultimately denied,” Brandy replied. “And get this – the reason they usually give is some nonsense that it violates the Federal Reserve’s rules, and –”
Bill interrupted. “What does the Fed have to do with anything?”
“That’s the weird thing,” her voice lowered, “a few months ago I got a loan app from a 62-year-old woman – she totally qualified, Bill! And yet they declined her because she had joined some non-registered investment trust. The FBI had sent out a report that her membership in the trust meant she could be anti-government. And the Federal Reserve put out a notice that we were not to loan money to people who participated in these types of investments. And of course, because we are a ‘National Bank’, we are required to follow the rules of the Fed – go figure!”
Brandy continued. “I’ve gotten a few of these. In all of the cases, it’s like someone does some sort of background check to see if the borrower is some kind of anti-government zealot.”
“Now in your case, I don’t think your profile came back as anti-government. But they seemed to be really attracted to your proposed business in gold and silver coins. In fact, the specific reason they cited was that yours’ was more of an investment in precious metals than creating an actual business.”
Bill rubbed his chin. “Hmmm ... But why would this be an issue? It doesn’t make any sense!”
Brandy leaned back in her chair with a quizzical expression on her face. “Bill, what’s your motivation for going into this business?”
Bill hesitated. “You’ve seen my business plan. Isn’t it obvious why I want to do this? I think I can make a really good income.”
Brandy eyed him thoughtfully. “I think there’s more to it than that, Bill.”
Bill was starting to become confused – curious, perplexed, wary ...
Finally, he looked into her eyes. “What’s your interest in this?” Bill asked. “You’ve already given me the news about the loan. Why are we still talking?”
“This looks interesting to me,” Brandy replied, “and I'm wondering if you’re open to bringing me in as a partner.”
Bill eyed her shrewdly, without saying a word.
Just then, the waitress arrived to take their order. They quickly made their menu selections and were just as quickly left alone.
Bill was still eyeing Brandy, even as Brandy was looking into his eyes with a smile.
“Why would I want you as a partner?” Bill finally asked.
Brandy touched her water glass and began stroking it. “Because I know where you can get the money you want. And besides,” she grinned, “I’m good at marketing.”
Bill looked across the table at Brandy. He stroked his water glass ever so lightly.
“So?” Brandy queried.
Finally, Bill made a decision. “I suggest, ah – I suggest that we get together at one of our places and talk this over.”
A broad grin crossed over Brandy’s beautiful face. “Awesome!”
* * *
Bill arrived at Brandy’s Scottsdale townhome at 6:30 pm – right on time. Brandy greeted him at the front door just as he reached for the doorbell. “I sure am glad to see you,” she said. “Please – come in.”
Bill responded to her broad confident smile with a smile of his own. “This is a great idea. I’m glad to see you too.”
Brandy led Bill into the living room.
“Can I offer you some wine?” Brandy asked. “I was able to stab some salmon at the local store – and I have a nice Pinot to go with it.”
“Yes,” Bill replied, “that sounds really good.”
“Please sit down. I’ll be right back.”
Bill’s gaze spanned much of the living room. Appointments in a southwest-style motif were the rule – and some were obviously expensive. Bill’s eyes were drawn to the large painting over the fireplace. The painting was a vista of a desert landscape. The vista was from a place high on a mountain looking across a wide expanse of desert and mountains – and it was breathtaking. She sure has nice taste, he reflected.
Brandy returned quickly with two glasses of wine and handed one to Bill. “Here’s to our discussion,” she said with a smile. Their glasses clinked, and they each took a sip.
Bill appreciated a nice wine. But more importantly, he also appreciated a beautiful woman who knew a nice wine. He mentally smacked his lips. “I like this! I really like the subtle flavors in it – I don’t often find this in a Pinot.” I need to keep this to the business. No romance – especially after Jennifer, he mused.
Brandy looked past her glass of wine and smiled. “Thank you. I’m somewhat particular about wine. I think Pinot – a great Pinot, at least – has a nice delicate flavor. And that’s what I look for in one of these.”
“So,” Brandy continued, “let’s get down to business.”
“Whoa – aren’t we going to have some small talk first?”
Brandy looked down sheepishly. “I’m sorry, but I like to be forthright with my business dealings.”
“But Brandy, we really don’t know anything about each other, and we’re already talking about a partnership.” Bill paused and looked into her eyes. “I need more time to feel comfortable.”
Brandy chuckled as she looked into Bill’s eyes. “Isn’t it the guy who usually likes to move fast?”
“Yes,” Bill laughed, “but aren’t we here to talk about business?”
“Okay. Okay,” Brandy continued, “instead of talking about partnership; how about we just talk about ‘what ifs’ – let’s just talk about what the business and partnership could look like.”
“Okay. Let’s do it,” Bill took a sip of wine. This seems safer than talking about a 'committed' partnership, he thought with a mental grimace.
“So, what does the business look like? Brandy asked.
Bill shifted in his seat. “Well, I think that the business plan spells out the fundamentals. So, I’ll just talk about the things that the business plan doesn’t say –”
“Whoa – wait,” she interrupted. “I'd like to hear your own words; business plan or not. I want to hear your vision.”
Bill took a deep breath. “Okay, I see several things happening. First, I see a U.S. Dollar that is being debased – it seems like they're forever printing more and more of 'em. Secondly, I see Y2K coming –”
Brandy interrupted. “Y2K? What’s that?”
“Y2K is a prediction that widespread computer failure will occur when the calendar changes over from 1999 to year 2000 – we call it the ‘Y2K computer bug. The problem comes when people can’t get their money out of a bank, and food and energy distribution stops. If this happens, the thinking is that people will go nuts and there’ll be mass riots.”
Brandy nodded. “But is this real? I mean, can this really happen?”
“Yes,” Bill replied. “There’s a possibility that this could all happen. Personally, I think they’ll fix most of the computer problems beforehand. But that’s not certain, especially since most software projects fail.”
Brandy shook her head. “Wow! Go on.”
“So,” Bill continued, “the third issue I see is the consequences of either Y2K or a general debasement of the dollar –”
“I realize that debasement is bad,” Brandy interjected, “especially for those who are on a fixed income or keep their savings in dollars. But we’ve lived through inflation before – just look back at the Carter years.”
“But this can turn a lot worse than the Carter inflation.” Bill was grim. “You might want to read up on 1920’s Germany and the Weimar Republic. Hell – their inflation was so bad that you needed a wheelbarrow full of money just to buy a loaf of bread!”
“So?” Brandy prompted.
“So,” Bill went on, “I think there could be a huge social or government upheaval because of this. We lose sight of the fact that many governments have been overthrown due to currency debasement alone, and it can happe
n here too.”
“Okay. But how does your proposed business address these issues?”
Bill sighed. And then he said, “That’s simple. Gold and silver have been money for 6,000 years. Governments can’t print it out of thin air the way they print paper money – so, it’s a great hedge against inflation. Quite frankly, it’s a hedge against an out of control government; and heaven knows, I think our government is getting out of control.”
Bill looked into Brandy's eyes. “Even without all the doom and gloom, I see this as a profitable business with good potential. And if things turn ugly, I see this as a business that will thrive and flourish.”
“Oh wow – talk dirty to me.” Brandy giggled. “I love a thriving business!”
Bill smiled as he gazed at her. “You seem to be taking this in stride. Doesn’t any of this scare you?”
Brandy focused her gaze on Bill. “Why should it? It’s out in front of me, and I know what it is – which means I can plan for it and make sure I take care of myself.” She looked back at him and said, “It’s the events I can’t see and can’t plan for – now that’s what gives me pause!”
Brandy looked up at the clock. “Oh! It’s time to put on the salmon. The rest of the meal is about ready!”
Bill followed her into the kitchen. Damn, she's beautiful, he thought.
Brandy bustled around the kitchen; grilling the salmon and putting the food on the table. Bill helped out with setting the table.
Finally, Brandy stood over the table with her hands clasped. “Okay – we're ready. Please have a seat.”
They sat down to eat and were soon immersed in salmon and small talk.
Chapter 10
Brandy looked at her watch – 8pm. She had put in a long hard day on loan applications; and there was still a large stack waiting for her to process. Aw hell! These will still be here tomorrow, she thought. She grabbed her purse and jacket on the way out to the parking garage.
As she walked toward the garage, she reflected on Bill and his business plan. She smiled. I really like him – and his business plan looks really good! And then she thought back to Dallas – to her last marriage, and how it ended. She could still feel her ex's fist ...
Greed Page 17