It never ceases to amaze that many businesses spend more time comparing and preparing for small changes in their business, yet don’t put the same time and research into raising company finance.
This may be down to a basic understanding, and that most high street lenders (banks) are guarded about how they asses finance, and what they do and don’t like to see within a proposal.
But why guess? Why not find out what your bank likes, then give them lots of it. Next, find out what the don’t like and do something about it.
This can be thought of the same as going through airport security. So, it is summer (believe it or not) and you are packing your bags and heading for sunny Spain. You probably know what you can take with you, it will be something like
- No sharp objects in hand luggage
- No liquids in hand luggage
- One smallish bag
- Everything else in the suitcase and in the hold, maximum baggage weight 25 kg
Or something like that. You will also know that a heavy metal belt will set off the metal detector and you may need to remove your shoes.
All this is OK as you were expecting it.
Apply The Same To Your Bank Loan
In other words-
- Think what will set off the banks alarms (recent performance, reliant on one buyer etc)
- Think what you are allowed (be realistic about what you ask for)
- What needs to be ‘put in the hold’ i.e. what is there in your business that may cause a concern and how do you address it to the banks satisfaction?
It is all about understanding what each other wants, what makes your business loan a good proposal and what forms the business risks.
We have created a short animation on this basis, it is light hearted but you will get the gist.[responsive_vid]
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