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How to get your Bank Manager to sanction your loan application

Written by: Mark Gwilliam

Article Overview: Financial skills are one of the most important skills to master in business. You will need financing at some stage in your business; beginning, expansion, or for equipment purchases. Understanding what a lender will be looking for and being able to provide it, will improve your chances of financial success.

How to get your Bank Manager to sanction your loan application

Financial Ability to Repay
One of the most obvious things that a lender will be interested in is the ability of you to financially repay the loan that you are requesting. Before you present your loan request, create a current list of assets, income and liabilities. Create this list for both your personal finances and your business finances; the lender will want to see both. Include your business’ assets as well to show the progress that your business has made if you are requesting an expansion loan. Lenders will be impressed with growth. Lenders also like to see assets that will protect them in the event of a defaulted loan and a Borrower that is organised and proactive in preparing this information will be impressive.

Expertise
A lender is often not just betting on your financial ability to repay a loan, but on you yourself. Prepare an updated resume of your business experience, successes and business skills to support your business case to the lender that you are a good risk. Your personal presentation is a sale. Sell yourself as a reputable, honest, experienced and valuable investment for them to consider loaning money to.

Business Plan
Prepare an updated and detailed business plan showing where your business came from, where it is currently and where is headed. Include accountant prepared and audited cash statements when possible to the lender, the show detailed and realistic cash flow projections. Lenders are going to want to see progress and momentum towards a positive business future. Include in your proposal the amount of the loan that you are requesting, what the money will be used for and the expected business success for repayment that will occur as an end result.

One of the most often overlooked factors for business owners is insurance. Lenders want insurance for loans in the event of a default. Life insurance, disability insurance, business insurance and plan to protect business partners from each other are all important factors to have prepared to show a potential lender.

Strong financial skills are essential to possess and maintain as a business owner. To read more about how to prepare for a lender presentation, read my article, “Business Loans- What a Lender is Looking For”.

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Article Tags: business assets, business case, business experience, business finances, business insurance, business skills, business success, cash flow projections, defaulted loan, disability insurance, end result, financial ability, important factors, impressive expertise, insurance business, loan lenders, loan request, personal finances, personal presentation, potentia



Related Forum Posts
Women getting financed - Spouses shouldn't be co-signers, they should be part of the loan. Lenders prefer married couples to apply together, it stregnthens the loan because the female can show outside income while she's managing her new business. Outside income means showing a lender there is other income aside from what she is drawing on her new business. A lot of women apply alone and only show their assets and do not include their husbands which is a mistake. All assets, regardless of who's name they are in are considered joint assets in a lenders eye. When you show all assets it stregnthens the loan because you are showing stronger net worth / collateral making for easier loan approval. We understand that the woman prefer to do it alone, but she has to ask herself what's more important getting financed or trying to do it alone? A husband can be on a loan application at a very small percentage (5%) and doesn't ever have to take part in running the business. And when listed on the application (under 20%) the lender will not look into the husbands credit or personal history (so he is pretty much kept out of the loop) but can help stregnthen that loan in order to obtain approval.
Re: How long should a Business Plan be? - One thing that I would advise you is to really understand who you are targeting and how you can close the sale. Very clear and researched figures, when I started out I was eager and neglected this vital component it cost me a lot of time. Be realistic with yourself, and verify everything. This document should be able to pass inspection by any 3rd party, ie Bank Manager etc, irregardless of whether you are looking for funding or not.
BDC - [quote="IWDCanada":jib6tqt9]I think if you try to do business in the Maritimes the Business Development Bank of Canada might be able to provide grants.[/quote:jib6tqt9] On that note, does anybody have any experiences with the Business Development Bank of Canada that they would like to share? I have been considering approaching them for a business loan.
Re: BDC - [quote="Jones":255lkmrn][quote="IWDCanada":255lkmrn]I think if you try to do business in the Maritimes the Business Development Bank of Canada might be able to provide grants.[/quote:255lkmrn] On that note, does anybody have any experiences with the Business Development Bank of Canada that they would like to share? I have been considering approaching them for a business loan.[/quote:255lkmrn] I'll be working with the BDC later this month on a few projects. From what i've been told they are really great when it comes to small business. Their loans have a little higher interest but their payment terms are a lot easier to swallow. I can give you a contact if you need.
You can see my Bank statement......... - Hi there, Today we are bombarded with 'Business Opportunities' by the multitude. I believe it is possible to earn a lot through the internet, but it is hard work. Nobody gets it very easy on a long term basis. [b][b]How much notice do people take[/b], [/b]when the Bank Statements are shown as means of 'how credible' their business idea is? Are they always totally true? They look authentic. The whole industry is growing rapidly. What is your experience? Is there any regulation in presenting the 'Bank Statement' or other statements from 'Click Bank' etc ? Kindest Regards Beat "Unlock People's Potentials!"


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