Getting a bank loan: Part two
Last week, we revisited tried and true best practices to get a business loan from a bank by qualifying them like a prospect, including: Who makes the decision? What do they need? And how do they want it?
This week let’s cover the last three:
- What motivates them?
- Are they motivated?
- What you have to do?
What motivates them?
All banks need to make loans, but all banks don’t like the same kinds of loans. Some are set up to make working capital loans, and some aren’t. Most banks make real estate loans, but each has its own real estate preference. And all banks like to loan money for things with serial numbers, like vehicles and equipment.
Perhaps, your banker will give you an indication of their level of interest in your loan request. But if not, you should ask.
Banks will fight for loans, but they’ll kill for deposits. They like personal checking accounts, but they LOVE business operating accounts.
A bank’s loan motivation increases if you have daily deposits of any size and are willing to place your operating account with them. You should know the value of your deposits to a bank, and use that information to your advantage.
Are they motivated?
You can tell how motivated a bank is by how helpful the loan officer is. Her excitement is no foreteller of success, just of motivation. But if she seems indifferent or unmotivated, that’s probably not a good sign.
It’s a good idea to take your proposal to more than one bank; as mentioned before, every bank is different. But don’t wait until you’ve been turned down by one bank to take your proposal to a second one. And be sure at least one of the banks you give your loan proposal to is an independent community bank.
What do you have to do?
Bankers love field trips. Give your bankers a demonstration of the new equipment the loan is for, or take them to see the building plans or real estate you’re looking at. Show them how the object of your loan request will help you grow profits, deposits and especially jobs.
The best way to get a business loan is to do your homework, anticipate what your banker needs and get them what they ask for. And if the bank that was loyal to you when you needed them doesn’t have the best deal this time — but it’s a deal you can live with – “dance with the one that brung you.”
Write this on a rock ... Qualify a bank like qualifying a prospect, and your loan chances will improve.
Jim Blasingame, Creator/Host of The Small Business Advocate Show
©2010 Small Business Network, Inc. All Rights Reserved
©2010 Small Business Network, Inc. All Rights Reserved
Category: Articles by Jim Blasingame
