5 Things Your Lender Will LOVE
Feb 15, 2021
One of the most challenging, yet inevitable, parts of being a small business owner is applying for a business loan.
Whether you are a start-up or have been in business for many years, it is likely that there will come a point in your entrepreneurial journey where you will have to visit with your bank, credit union, or non-traditional lender like Dakota Business Lending about financing options to help you grow. This can be an overwhelming and intimidating process and can leave you with many unanswered questions.
What is the best way to go about asking for financing?
Where do I begin?
How can I impress my banker and increase my changes of attaining financing?
We know these questions can be paralyzing to small business owners, and we do not want them to stop you from growing and moving forward. Check out these five simple ways you can make a good impression on your banker and increase your chances of attaining financing.
- Know How Much You Need – One of easiest ways to impress your banker is to lay out your exact needs and communicate them from the very start. Before your meeting, take the time to calculate how much financing you need and exactly what it will be used for. Tell your lender right away and bring along supporting documentation (purchase agreements, quotes/estimates, or printouts from website with pricing) so you can show them exactly how the capital will be used. The earlier they understand your financing needs, the more they can help.
- Have a Timeline - It will be helpful for your lender (and for you!) to provide a breakdown of your financing and at what stages you will need it. Lay out a simple timeline highlighting the various stages of your business’ start-up or growth and where the financing will come into play. Telling your lender when the capital is needed can help them determine the best financing package to meet those needs in the timeline that you need them.
- Come Prepared – You should bring documentation regarding your business and its ownership including financials, a business plan, and basic information about the owners. You can find a detailed list of what exact documents are necessary before meeting your lender here. Remember, the more prepared you are, the better your lender will be able to understand your needs and how they can provide financing to fill the gap.
- Be Up Front – It is important that you are transparent with your lender disclose any necessary information up front in order to avoid any potential challenges or delays moving forward. Information such as any personal credit issues, prior or current bankruptcies, late payments, collections, divorces, etc. are among the topics you should discuss with your banker, as these details will be critical during the application process. When in doubt, share your concerns or questions.
- Show the Impact – Your banker will love seeing exactly how this financing will impact your business and its financial performance going forward. Will it increase sales? Reduce operating costs? Improve efficiencies? Cover inventory buildup prior to seasonal sales peaks? Lay out how their financial assistance will support your business’ growth and increase its longevity so they can see just how critical the capital is and how widespread the impact will be.
These five tips are your keys to success when visiting with your lender about financing. Your banker will love your preparedness, your transparency, and your clarity and you will make a lasting impression on them as they work to determine the best financing package for you. If you are looking for more guidance as you prepare to ask for financing, download our “Preparing for ‘Your Ask’” checklist or reach out to someone on our team for more assistance.
Don’t let your questions prevent you from taking the next step forward for your business.