Be Prepared For Your Business Loan Interview
If you have recently started your own business or have purchased a franchise, chances are that you will be seeking a business loan from a private bank. If this is the case, you must enter your loan interview prepared. Bankers will expect you to be able to provide certain information, and not having this information will negatively affect your loan experience.
You will need financial documentation. This documentation should specify the amount of your desired loan and details on how the loan will be spent. You should also be prepared to back up your documentation with sound reasoning. In addition, the banker will want a projection detailing your anticipated loan repayment schedule. In the case that you cannot repay the loan, the banker will also want to know what the business has to offer as collateral (for example, real estate holdings).
A documented, financial history of your business is a must. If you are seeking a loan for an already established business, then balance sheets for the past three years will be requested. If the business is new or a start-up, a well-drafted, thorough business plan will provide the needed information.
Before granting a business loan, your banker will want to be assured that you have the financials of your business well understood. Therefore be prepared to bring along projected cash flow statements for your business. These should cover the following year of your business and should be broken down month to month. Demonstrate your knowledge of your business by being able to make predictions about the standing of your business, industry, and employees for up to five years in advance.
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