So, you’ve made the first step in your pursuit of the American dream, you’ve started your own small business. Things are moving in the right direction, sales are picking up and, if you’re not showing a profit yet, you know it’s just around the corner. But, in order to make that next step, to get a jump on the competition and really realize your dream, you need a cash infusion.
Whether it is for equipment modernization, to hire the right salesman, or get the word out; making money takes money. Before going to the bank and asking for a loan, be sure you are prepared. Knowing what lenders are looking for to begin with will make you appear more professional and less risky, increasing your chances of landing that business loan.
A Solid Business Plan
Before making the phone call to set up your business loan interview, make sure you have all your ducks in a row. A business plan will help organize your information and highlight your strengths. This little planning will prepare your application to be on the forefront for small business loans.
- Know your market – Be sure that your potential lender knows that you understand your market. Who are your potential clients, what types of purchases do they typically make? Do you rely on repeat sales, or are you marketing to a wide consumer base?
- How will you use the money? – You’re asking for a lender to put up cash based on their belief that your business will benefit from it. Be prepared to have a plan showing how the new money will be spent. What kind of impact will this have on sales in three months, six months, and one year?
- Know your competition – Take this opportunity to show you’ve thoroughly researched your niche. Talk about your competition, and what makes you unique.
It is often said that sales is all about selling yourself, and you better believe it’s true when you’re asking for a business loan. The bank, after all, is investing in you and your plan as a business owner and operator.
- Speak to your strengths – It’s time to showcase yourself and your business. Whether it’s customer service, product quality, or speed and efficiency; highlight whatever it is that makes you different from – and better than – your competition.
- Be positive, professional and knowledgeable – And avoid coming across as a used car salesman. If you can convince potential lenders that you are likeable, half the battle is won. If they feel like they want to buy something from you, they’ll be secure in the knowledge that they are making a sound investment.
Treat your business loan interview the same way you would treat a sales pitch to a potential client. Remember, you are your brand, so make yourself stand out.
Do not become discouraged if you are denied on your first try. Business loans are a risky endeavor for banks. Remain positive and shop around. You are also interviewing your lender. Make sure that the relationship will work both ways, and that they can offer the support that will help your business succeed.