Applying for a bank loan can be a difficult process. But despite the borrowing challenges facing small business owners, it is possible to have your loan approved.
Bankers are not in the risk business, protecting their capital is paramount. Their careful examination of the integrity of a business has made it a priority for businesses to maintain a good relationship with their bank in order to preserve their future access to funds.
Develop a strong business plan
This is one of the first vital steps to ensure that the bank will identify you business as a low risk and gain the confidence to provide funds. A comprehensive business plan will highlight the viability of the business, provide the owners and managers business experience, the expenses that the loan will cover, the financial situation of the business, market changes and detailed sales expectations.
Improve your financial understanding
It is important to be aware of the financial status of your business by obtaining credit reports and public records. It will help to show the banker that you know your business and are mindful of the research the bank will acquire when deciding on the amount, if any, to loan to the business. Learn the banking language Understanding banking terms such as credit ratings, cost of capital and other financial drivers will place business owners in a secure position when negotiating the terms of their loans.
Keep the advisor informed
Financial advisors are there to advise and will have an intimate knowledge of bank processes. By keeping them posted of any plans or changes, the advisor can better advise the business on the best course of action, and ensure that the business will continue to prosper.