It can be a nervous time when you are first starting out with your business and trying to secure funding through a bank loan. Whilst is may be daunting, it should also be seen as an exciting time because your business is about to come to life. There are a number of ways to improve your chances of getting the perfect small business bank loan.
Where possible you should try to create a strong bond between you and the bank that you are applying to. It is a good idea to go along to the bank in person when you apply for the loan, this way you can explain about the business and also make the application more personal. Even if you’re not applying for a loan it is an excellent idea to go along in person to the bank to explain your business and it’s future.
Be ready to provide evidence about your business
In order to get a loan all businesses need to show that they are making money now or will be making money in the future. If you don’t have any proof of any cash flow and you’re usually in the red then there’s no way that you’re going to get a loan. Banks are now lending on cash flow and profit before approving loans. So, if your business is running in the black then you should show this to the bank, put together a good presentation to show this.
Try more than one bank
Always keep your options open. If you are declined by one bank then you should always contact others. You may learn valuable lessons after your first application and see where you went wrong, meaning that you will be able to put together a stronger application the next time round. You may not have developed a relationship with every bank but it is good to have options available to you.
Prepare yourself for questioning from the bank
You should prepare for the concerns that the bank will raise when you have your meeting, it’s great to hve your answers ready. It is also good to prepare yourself so that you can show the bank that you recognise the risk involved but also your plan for dealing with this risk.