How to secure that essential business bank loan

No matter how innovative or potentially lucrative an entrepreneur’s business idea is, if the venture doesn’t have access to the cash it needs then it won’t be able to get off the ground.

As anyone with their own company will know, outsourcing finance and securing the right loan from a bank isn’t easy, but following these five tips should help ease the process along:

Capital strength

Any savvy lender will run a comparison of the amount you wish to borrow with the funds already in your company. A willingness to put a lot of your own cash into the business will show lenders that you’re committed to making your venture a success, no matter what.

Safety net

Assets, such as equipment or stock, can be used as collateral to be considered in the event of a borrower being unable to pay back the money lent to them. While the majority of lenders would rather work with their clients to see that the actual money is repaid, offering assets as collateral adds an extra measure of security to an application.

Commercial health

The life blood of any commercial venture, a healthy cashflow shows lenders that you’re in a strong position to be able to pay them back in a timely manner. Records and projections will likely have to be produced as proof, and in some cases, details of personal finances and your business’ payment history may also have to be provided.

The bigger picture

What is the state of your sector? While it may seem, at a glance, that the condition of your company – and your company alone – matters in securing finance, this is untrue. Smart lenders will look beyond your enterprise at the conditions surrounding it, as these are often reliable indicators of impending success or failure.

To show the banks that you’ve taken the economic conditions of your sector into consideration, come to meetings prepared to discuss possible strategic measures for predicting and dealing with potential hurdles.

Getting personal

It’s not all about economics. Lenders will in all likelihood examine your educational history and your attitude towards doing business, and how both have affected your track record so far. The more serious about your application you are, the more favourable the first impression you’ll make.

You can also point lenders towards strong credit reports and glowing references from people with whom you’ve previously traded with to bolster your case.

To be sure of a solid application and to increase your chances of accessing the cash that you need, outsource your finance requirements to professionals in the field.