Since the Great Recession, entrepreneurs who own small businesses started to have a hard securing business funding from banks. But with the current economic situation, it’s not surprising that the number of small business owners who were able get financial supports from banks is at record low.
This, however, does not mean that it’s impossible to secure fast business funding from banks. Here are some of the things that an entrepreneur can do to increase his or her chances of getting a loan:
· Be ready with all your financial statements and documents – A documentation of your company’s financial situation is very important if you want to secure business funding. Make sure to show the banks your latest financial statements including your balance sheet, profits and loss, and cash flow investments. More importantly, keep in mind that you have to be able to explain these without any aid from a consultant or an accounting expert. It’s always plus to deal with owners who understand his or her finances.
· Clearly explain how much do you need and how do plan to pay it – Keep in mind that saying “trust me” to a banker is not going to secure the funding that you need. Instead, tell the banker how much do you need and spend time explaining how you plan to pay it back. Don’t forget that the most important thing for banks is job security.
· Set an exemplary track record – You know that your bank trusts you once you secure a loan. Now that you have it, make sure that you’ll set a good track record by paying on time. Usually, finishing a payment of a loan would give you an opportunity to borrow again. Isn’t that what everyone wants?
· Don’t let go of your bank – There are banks that offer better deals that would tempt small business owners to break their relationship with their former banks. While these deals are worth the attention of every entrepreneur, keep in mind that trying to stick with one bank may be beneficial in the long run. Banks may set higher standards for loan applications in the future, and you may secure one because you’ve already established a good relationship with your bank.
· Pit the banks against each other – Making your search for business funding a competition may be good idea, especially for first-time applicants. Get the offer of one bank and ask another if they can offer better deals than that. Take advantage of the need for banks to seal a deal with potential clients.