So you want to get finance for your business. How about some simple tricks and tips to enable you to get that business loan a little bit easier?
Here are our simple tricks that will drastically increase the ease in which you can raise a business loan.
Bank Business Loan
If you are borrowing anything up to £25k then it is unlikely the bank will want your business plan. The only thing they will really be looking at is your current account. If that operates well, so within the limit, regular turnover etc, then that is about all you business bank will be looking at.
So don’t spend ages on a business plan and detailed forecasts, it is unlikely anyone will look at them.
If you have any doubts over how well your account has been run, then have a look at the ‘bank warning signs‘ article here.
How Much Does The Commercial Lender Want My Business?
Each commercial lender has different preferred sectors. Within each of these sectors will be guidelines as to how much they will lend. Our trick here is to make contact with the lender and pretend to be someone else who just happens to be doing what you are doing, then ask the questions you want to know.
Use this knowledge to shape your approach accordingly. Then approach the lender of your business loan using your new found knowledge of what they are looking for.
Give A Carrot
The worst thing for most business loan providers is to approve a loan, only to find that the customer doesn’t proceed with it. Set down your honest intentions, or give a carrot.
Tell the lender that if they can do what you want then the business is theirs. Tell them that if they can provide you the business loan then they can do your keyman insurance, workplace pension etc. Give a carrot to get the deal done.
Don’t Big Up The Competition
When speaking to a lender don’t start quoting what another lender may have offered or be willing to offer you. Whilst having another lender in the background is good for you, the message it provides is to the lender is;
“Even if I can do this loan, the chance are you will want a better rate and may not even take the offer if we can provide one to you”
What this does is have the opposite effect. The lender will be less motivated to provide the business loan to you and will look for the easier application from another business.
The Lender Does Not Know As Much As You Think
There is no point in having financial information, forecasts and balance sheets unless you know what they mean and where the figures have come from.
Ask your accountant to show you what the figures mean and where they have got the figures from. It is important you understand them.
Don’t think that the business loan provider understands all these figures, they don’t. They will understand some of them, but never as much as you think. Spend an hour with your accountant so you understand your figures, it will only take an hour to know more about the figures then 90% of bank managers know.
If you have any queries about this post then please give Lime Consultancy a call on 01293 541333, contact us here or add your comments below.
By Dave Farmer
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