Four Steps to Help Your Company Get More Money From Your Lender
Need a small business loan? Check out these four tips to make a better impression at the bank
I’m often asked by customers, “How can I borrow more money?” The lending process isn’t always simple, but if you follow these four steps, they will help you and your company get the most money from your lender.
Tell your lender the strengths, challenges and opportunities your business directly faces and do not oversell. You are creating credibility, so always be direct and honest. This also provides the opportunity to explain your challenges and how your plan addresses them and minimizes the risk. Nothing kills deals faster than the lender finding out negative information late in the process. This wipes away your credibility and makes your lender ask, “What else is he hiding?” It’s always better to tell your story, than to not say anything and let the lender create their own idea of what is going on.
Answer why you need the money
The context of “why” you need money and the results you expect, are critical to giving your lender confidence that you know what you are doing and are a good risk. This is your opportunity to explain how you are going to take this money and create a significant outcome that increases your revenues, profitability, and stability. Make your lender feel confident that you are making (and just as important, they are making) a good decision in lending you the money.
Send any needed information as a single organized package
Few things in lending are more frustrating than the unorganized guy who sends 22 faxes to provide five pieces of information that could have been emailed in a single attachment. The more concise and professional you appear, the more confidence the lender will have in you. Additionally, the people doing the work of clearing credit stipulations, documentation and funding are great people to have on your side. They are the ones that can make the process easier or more difficult.
Stay on top of the process
Manage the process, make sure you have your stuff together, and nicely push the lender to perform. When you are organized and professional, it builds confidence. The lender will think that if you manage your business like you are managing the process then this is a good deal. This will also help you close on time and potentially reduce costs.