Ten Steps to Take Before U Go to the
Bank..or
What
to do to IMPRESS the banker so
you won’t be kicked out the door!
Going to the bank often feels like going to the dentist and having a
root canal without the benefit of anesthetic…OUCH!
Yes, it is tough out there. No, it
is not impossible. Yes, you do have to be prepared. No, not everyone will be
the right lender for you. Getting the right paperwork prepared (ugh), the right
lender (yeah) and the right attitude are essential.
To lessen the pain of rejection I have prepared the following Ten Steps to Take BEFORE you Borrow.
First step: Know what you need
the money for and how you will pay it back.
You are borrowing money for a reason and that reason must be able to
generate the loan payment. An up-to-date
business plan is essential.
Second step: Know what type of
loan you are looking for - short term, long term, working capital, start- up
capital, accounts receivable, line of credit.
Understand an SBA loan. It is NOT
A Direct loan to you. It is a guaranteed
backing to the bank that eases the bank’s concerns about taking a risk on you.
Third step: Know your credit
score. Get reports from all three
companies. If you have had a problem, write down the reasons and give the explanation
to the banker.
Fourth step: Correct any mistakes
on the credit score. (Note: Over 30% of credit scores have wrong
information)’. Be vigilant. Credit
companies are not so interested in posting correct information; they are just
interested in reporting information.
Garbage in, garbage out. Stay vigilant
Fifth step: Prepare a personal
financial statement. This is a snap shot
of your financial worth. What you owe: mortgages,
credit cards, installment loans, line of credit. etc. The Value of insurance policies, IRA’s, pensions plans, stocks, bonds, accounts
receivable, tools, furnishings, office equipment, etc. Copyright, 2012 S. I. Business Associates.
Sixth step: Know what resources are
required for the type of loan you desire.
Are there government or non-profit loan funds for which you can apply? Understand each application process. They are not all the same.
Seventh step: Make sure all legal
documents and insurance policies are available and up to date. If a corporation, have that information
available. Know where your corporate seal is and please update your corporate
minute book. If a partnership, be
prepared with fictitious name and/or anything that identifies your business
legally. Acting dumb and getting what
you want by being cute only works in the sitcom world.
Eighth step: Pick several
financial sources for your approach.
Look at several banks, government entities or non-profit organizations
or other possible lending sources and discover their criteria. Most are similar,
yet there may be something of which you are unaware that could become a road
block. Request a financial checklist for
a loan from each possible source. She
who is prepared is more likely to be successful than he who is not.
Ninth step: Interview the bankers. Get to know them. What is their lending authority? What are the
requirements for a loan? What credit
score is required? Most banks these days
do not have direct lending authority. Most
are unfamiliar with most the government programs that are available. Pick one that is most interested in you and
will work with you.
Tenth step: Schedule an
appointment. Dress appropriately. Have paperwork in hand. Talk directly about any problems,
opportunities or obstacles and show them you have done your homework.
To learn more about borrowing please listen to my interview with SueMalone, The Money Lady.
Want to make sure you are prepared to
go to the bank give JoAnn Forrester a
call at 412-440-6969. JoAnn and
staff have secured over 40 million
dollars in small business/investment capital for small business. Do not go to the bank alone….get expert
guidance. 412-440-6969. Copyright 2012
S. I. Business Associates, 412-440-6969.
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