As a bank, youâ€™ll understand better than anyone that bank financing is essential for most small businesses, whether theyâ€™re just starting out or looking to expand and grow their business. There are few businesses that can launch or grow without bank financing, so to give them the best chance of succeeding in their application, there are easy ways to guide them through the process.
Of course, all banks have different criteria thatâ€™s relevant to the individual bank, but there are things almost all banks have in common when theyâ€™re considering a business loan application. It can only boost your relationship with your business customers if youâ€™re able to give them a guide or checklist so they can maximize their chances of their application being approved.
Businesses will be looking to borrow as little as possible, but enough so that they wonâ€™t have to come back to you any time soon. So itâ€™s important to explain to them they should factor in a small buffer now that they might not need right now, but itâ€™s better than having to return to you at a later date and admit their initial estimate was wrong.
So sit down with them and outline all the details theyâ€™ll need to provide around what the moneyâ€™s for â€“ stock, equipment, set-up costs, working capital etc.
What youâ€™re looking to do is underline the importance of being prepared and of having all pertinent information at their fingertips. So if youâ€™re offering them a checklist of things to cover, you should include:
In the end, youâ€™re looking to get across to them that banks like to know as much as possible about a business and who runs it before agreeing to lend them money. So itâ€™s important to explain the concept of a good and bad risk, and an outline of how you as a lender determine those risks.
What it all boils down to is good preparation. And the more you can help them with that, the better your relationship with your business customers will be. Youâ€™re also getting a good idea of how organized and diligent your customers are, so itâ€™s a win-win situation for both of you.
Here at TSBC, we can offer you great content around helping your small business customers to increase their chances of success when applying for loans. Contact us on firstname.lastname@example.org to find out how we can help you.
Glen is the founder and CEO of The Small Business Company, a New Zealand based agency that specialises in helping banks communicate with small businesses through content marketing. He has written a number of books on small business principles and is a sought after consultant and conference presenter.