Tips for Getting Your Bank Loan Approved

Posted by Felix Okoli on Sunday March 10, 2013 at 20:59:20:

When there is no evidence of previous record in business, securing a bank loan will be difficult. Banks often cite risk factors that are involved and increasing costs of securing small accounts as their main reasons. No matter your type of business, here steps you can take to improve your chances of getting that much needed bank loan.

1. Remember that to stay in business, be afraid to banks need to make loans. Don’t be afraid to make loan request, which is what the bank officer expects you to do. You need to increase the chances of getting a loan by looking for a bank that is familiar with your industry and has done business with companies like yours before. Look out for banks that are very active in small business financing. Be aware that banks will demand tough collateral from you if you are a starter in business.

2. As an entrepreneur, make sure you are well prepared when heading to your banker’s office for loan request. You will need to convince and show evidence of the fact that your request is a low-risk type. Some of what you are expected to show them are, a completed loan application form, copies of cash flow and financial statement covering at least 3 years and your cover letter.

3. You should try and learn to anticipate any question he or she may ask. Remember that a combination of information and preparation is the most powerful tool in the world. A person who has confident in him or herself and thoroughly prepared is four times more likely to have his or her loan approved than the fellow who has no answer to some of the basic questions a banker would ask. To show that you are serious, some of the answers to the banker’s question should be from your business plan, not just theory. Some of such questions are how much money you need for your business, how long you need it, what you need it for, etc.Basically, business need to loan for three reasons, namely to buy new assets, pay off old debt or pay for operating expenses. You need to be as accurate as possible, though adding extra is not bad. You need to state also when you will repay the loan.

4. Try not to be apologetic and keep your negative attitude in check. Present yourself as an entrepreneur who is able to pay back the loan when granted. You can help boost your image by presenting your loan officer with promotional tools of your business such as flyers, brochures, articles, press releases, etc

5. Finally, dress in a professional manner for the interview. Remember it a business transaction, so treat it corporately and wisely.

I wish you success in your entrepreneurial pursuit.