3 TIPS TO GET YOUR BUSINESS LOAN APPROVED

How To Make Lenders Love You

If you want someone to say yes to you, you have to make the path simple, clear, and short.

The same is true when asking bankers for money to start, run, or grow your business. Your goal is to get them to say yes. Their goal is to get you through their pipeline as quickly as possible with the best possible outcome for the bank. (I admit this is an oversimplification of the relationship between borrower and lender, but I’m aiming for 500 words here.)

So, in the spirit of helping you “get to yes”, here are the three things business owners need to do to help their lenders say ‘yes’ and write a check.  

1. Make Bankers Lives Easy

In my former life as a loan officer, lending manager, and credit union CEO, my desk was always full of loan applications.

In good times, people wanted money to grow and they knew we had it. In bad times, they needed money to stay alive and they hoped we could help.

The applicants who had the quickest outcomes—and more often than not the best outcomes—were those who adhered to the following 3 rules:

· Provide a Written Executive Summary—Essentially, you need to write down your elevator pitch. Tell your banker what your business is, how much money you need, and why you need it.  

· Come Prepared—At a minimum, you will need to provide the application (with a signed credit release form), tax returns, financial statements, and projections. Be ready to provide all of this during the first interaction with your banker.

· Stay In Contact—To stay top-of-mind with busy loan officers, you have to stay in regular contact without annoying them. Give them a call three or four days after the initial contact and then follow up with an email recapping the conversation.

2. Tell Bankers What You Want

Bankers are not experts in your business, your strategy, or your needs. As such, you need to tell them exactly what you want from them and why.

Don’t make bankers figure out what you need or the max they can give you.

You’re there for a reason. Tell them, plainly, what that reason is.

Here’s a template: [Business Name] is seeking a [loan amount and type of loan] at [interest rate] over [desired months or years] to [reason for borrowing the money].

“ACME Bowling Lanes is seeking a $75,000 term loan at 6.5% interest over 5 years to help us cashflow the renovation of our arcade.”

3. Know Why The Bank Will Say No

When you’re in front of a banker, you’re selling them on the strength and credit of your business. To do it right, you have to anticipate and overcome objections.

Meet with an advisor or business loan broker (like Tidrow Capital) to help you understand the weak points in your application, financials, or plans. By doing so, not only can you avoid being caught off guard by questions about possible deficiencies in your business, but you’ll also know how to respond to them with concision and integrity.

Businesses who make it easy for banks to say yes, are the ones who are most likely to get the capital they need. To make ‘yes’ easy for banks, you have to tell them who you are, what you need, and why your business will provide them with a certain return on their money.

Tidrow Capital Group, LLC is a privately held business advisory firm that specializes in helping businesses strategize their funding needs and gain access to the capital they can use to grow with confidence.