Mission Coffee House – a shop with purpose
Jeopardy! champ pays it forward
February 17, 2025
When seeking financing for a business, it’s crucial to remember that the relationship between you and your lender is a two-way street.
While the bank evaluates your creditworthiness and ability to repay, you also have the opportunity to demonstrate that you’re a reliable partner.
As a lender, I understand the importance of these interactions.
But as someone who also sits on the side of the table as a customer, I know how vital it is to present yourself in a way that instills confidence in the lender.
Here are a few key steps to show banks you’re serious about securing that loan, which can lead to a much smoother approval process.
Professionalism is key
From the moment contact is initiated with a bank, professionalism sets the tone.
This is your chance to prove that your business, and you as a leader, are credible and capable.
Prepare thoroughly
Before meeting with your lender, ensure all necessary documents are in order.
This includes a business plan, financial statements, tax returns and any other required documentation.
The more organized you are, the easier it will be for the lender to process your request.
Have these items ready to be sent electronically when able.
Bogging your lender down with a lot of paper does not make the process any faster.
Be ready to send as much of the punch list request electronically as possible.
Presentation matters
Whether meeting in person or virtually, maintain a professional demeanor.
Dress appropriately, communicate clearly and respect the time of your lender.
Remember, they’re assessing you as much as your business.
Communicate clearly, consistently
Communication is the cornerstone of any successful relationship, including that between a borrower and a lender.
Be transparent
Provide clear and honest information about your business’s financial health, goals and challenges.
Banks appreciate transparency and are more likely to work with you if they trust that you’re providing accurate information.
Respond promptly
Timeliness in communication is crucial.
If your lender requests additional information or documents, respond as quickly as possible.
This not only shows that you’re serious about securing the loan but also that you’re capable of managing deadlines – an important trait for any borrower.
This is a common issue that slows down the process for all involved and usually leaves both sides frustrated at some point.
Meet timelines for bank requests
Once the bank provides a punch list of items they need from you, it’s essential to meet these deadlines diligently.
Prioritize their requests
When a bank asks for additional documentation or clarification, it’s crucial to make it a top priority.
This demonstrates your commitment to the process and helps keep the loan approval timeline on track.
Organize your responses
Provide the requested information in an organized and easy-to-review format.
This minimizes back-and-forth communication and accelerates the decision-making process.
Banks appreciate borrowers who make their jobs easier.
Demonstrate financial responsibility
Lenders want to see that you’re capable of managing your finances responsibly, both personally and professionally.
Show a solid financial history
Present a strong track record of financial management.
This includes maintaining healthy cash flow, staying on top of debts and having a clear plan for how you’ll use the loan funds effectively.
Provide projections
Banks are interested in your ability to repay the loan.
Providing realistic financial projections that demonstrate your business’s future growth and stability will give them confidence in your repayment capabilities.
Understand the bank’s perspective
Remember, the lender is assessing the risk of lending to you.
Show them that you understand their concerns and are prepared to address them.
Discuss potential risks
Be upfront about potential risks to your business and how you plan to mitigate them.
This proactive approach can build trust and demonstrate that you’re thinking ahead.
Be flexible
Sometimes, the bank may request changes to your loan terms or require additional collateral.
Be open to negotiation and willing to find a solution that works for both parties.
Maintain professionalism after approval
Even after your loan is approved, maintaining professionalism is essential.
Keep the bank informed
Regularly update your lender on your business’s progress, especially if there are significant changes.
This keeps the lines of communication open and strengthens your relationship with the bank.
Meet your obligations
Make timely payments and adhere to any other conditions of the loan.
Your performance during the loan period will influence your future borrowing potential.
Conclusion
Securing a business loan requires more than just meeting the bank’s criteria – it’s about building a relationship based on trust, professionalism and clear communication.
By approaching the process from both the lender’s and the customer’s perspective, you can better understand what’s expected of you and how to present yourself as a credible and reliable borrower.
Remember, the goal is to make the lender feel confident in their decision to finance your business.
The more prepared, transparent and responsive you are, the smoother the process will be – and the more likely you are to secure the financing your business needs.
