What You Need to Do to Increase Your Chances of Getting a Loan from the Bank
Get the business finance or loan one of the common questions people ask is, what can I do to increase my chances of getting a yes from the bank. Now in the current climate, where it is tough to get loans from the banks, that’s a great question to ask. But you know what? there are things there are actions that you can take today that will substantially increase your chances of getting a bank loan.
Write a Business Plan
Gone are the days when you can go in and give a verbal presentation to your bank manager about what you require. A business plan, present all the information that a bank needs to know in one document. Yes, the interview is important, but the business plan really capsulate everything that the bank needs to know. So do spend an invest time in writing the business plan, the bank will want it. The bank will expect it.
Identity and Outline Risks Within Your Business
Identify the risks within your business and outline what you’re going to do to mitigate those risks. The Bank’s credit assessment framework is all built around identifying the things that can trip you up. If you get tripped up within the business, then it means that your ability to repay, is much reduced, so the bank is wanting to know what are those risks, but more importantly, what have you done to mitigate them. Now, the bank will probably be able to identify those risks themselves, but you’re going to come across as a much more credible business owner. If you identify those risks and address them head on. Don’t let the bank bring them up, bring them up yourself, and outline what you’re going to do in order to lessen the impact, should those risks occur.
Prepare a Financial Forecast
Now when I mentioned this to many business owners, the common objection comes back as to why you shouldn’t do financial projections, and that’s because they’re guesswork. Well yes, they are. But when doing financial projections, it’s not the end result that matters. It’s the process that you’ve gone along, in order to get to the final result in going through that journey, you’re forced to sit down and ask questions of yourself. It’s going to be questions all around how profitable is this really what if my payment terms change, what’s the impact going to be on my cash flow. The end result may show that your idea or your concept may not be as profitable as you first thought. So, it’s a worthwhile journey to go upon to set out and look what your projections show.
Prepare for an Interview
Now, you can just go in and win it, but that’s not going to work. You have to go in there, fully prepared. This is your one opportunity to show that all of the ideas that you laid out in your business plan, you can actually deliver on that and why you should be given the business loan. You have to sit back and think, what are the key questions I’m going to be asked. And more importantly, how am I going to respond to that. So before going in, sit back, have a think about the likely questions you’re going to be faced with, and then start formulating a reply in your mind as to how you’re going to deal with them. It is so vital that you get the interview stage right.
Keep in Mind the Bank is Accessing You
Remember the bank is assessing you not the business. In the small business market, the bank is lending to you as an individual. The concept of the business in the small business market doesn’t really exist, It’s you. That will make or break your business. And that’s really the part, the whole reason for the interview process. The bank is wanting to look you in the eye and assess whether you have the ability to deliver on the promises that you’ve laid out in your business plan. So always remember the interview is your opportunity to sell yourself. Remember, you want to make the best impression. Showcase your services or products in the best way possible. Most people like to do this with a portfolio. If you’ve got multiple projects lined up look into wholesale photo book printing so that you can have a portfolio ready for each business segment. One for your previously mentioned plan, then one for each service or product line, and maybe one showcasing you and your experience too.
So here we are with five things that you can do to substantially increase your chances of getting a business loan approval from a bank or lender, it’s a different climate out there, but you must remember you have your part to play in order to help the bank manager help you. I hope you found this information helpful. Follow those five stages, and best of luck in your search for funding to help you build and develop your business.