Banks Rent Money, Don't They?
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Need a business loan?
How to use and improve your relationship with your bank.
Most of us treat banks as if they are utility companies or government agencies. Your bank statement even resembles a utility bill. But don’t be fooled.
Banks are in business just like you. Only they rent money.
That branch office is a retail outlet. Your banker is a highly trained salesperson. His or her job is to rent you money in a manner that guarantees the bank a profitable return. To that end, bankers want to reduce as much risk as possible.
Remember, banks profit by renting money and they demand evidence that your business can pay it back. To get access to the bank’s money, therefore, you must understand your banker and clearly communicate your needs.
What You Can Do
Here are some ways to improve your relationship with your banker.
What a Loan Proposal
Loan Request Summary State how much money you need, why you need it (for short- or long-term needs), how you expect to repay the loan, and when you will repay it.
Business Description Describe briefly the past, present and future of your business.
Management Background & References Outline your management structure. List the names of everyone involved and include a short background about each person. (Include this in a first request, or if you have made changes in your management structure.)
Market Strategy Explain your market and your market strategy as specifically as possible. Describe your typical customer, your forecasts, your advertising plan and price structures. Let your banker know how the current economic situation will affect your industry in general and your business in particular.
Financial History & Projections Follow your initial request with carefully compiled financial information: