Here Are 5 Ways To Raise The Likelihood Of Getting A Loan For Your Business

In this current economic climate, many small businesses may have seen a change in their ability to borrow funds from their bank. With banks conducting careful research to determine a business’ risk factor, it is more important than ever for businesses to maintain a good relationship with their bank to safeguard their future access to funds.

Prepare A Strong Business Plan 

This is one of the first steps to ensure that the bank will identify it as a low-risk business and, therefore, someone they are willing to give funds to.

A solid business plan highlights the viability of the business, information about the experience and success of the owners and managers, expenses that the loan will cover, and detailed sales expectations.

Establish A Personal Relationship

Over time, an owner establishes key contacts within their bank that are familiar with their business and financial needs. Keeping these contacts informed of any changes to the business or cash flow projections before it comes as a surprise will build trust between the bank and the business.

Know Your Business Inside Out

By keeping themselves updated on their financial status by obtaining credit reports and public records, business owners will know what research the banks will obtain when deciding on the amount to loan to the business if any.

Learn The Banking Language

Understanding banking terms such as credit ratings, cost of capital, and other financial drivers will place business owners in a strong position when negotiating the terms of their loans.

Keep Your Adviser Informed

Financial advisers are there to advise and will have an intimate knowledge of bank processes. Keeping them posted on any plans or changes will allow them to better advise the business on the best course of action and ensure that the business will continue to prosper.

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