Every lender you are going to go to will have paperwork requirements, which generally include a copy of your business plan. Most of the time, the lender will evaluate your request on the basis of the Five C’s of Credit as well as:
Preparation
Probably one of the most overlooked areas of lending is preparation. Be prepared and organized when approaching a lender. If you do so, you will be coming off on the right foot; the lender will see that your personal life and business life are not [obviously] out of control. You look professional and they will think that translates into your business (which it probably does, and should).
Preparation checklist when approaching a lender:
- Know how much money you need and then ask for that amount and that amount only. Not a penny more, not a penny less.
- Be prepared to tell them why you need the money, in a professional manner.
- Have a business plan available, bonus points for other plans (i.e. marketing plan).
- Tell them how much money you can put in and how you will eventually repay the loan.
Know the Lender, Know the Loan
You should really know what kind of loan you need and the lender that specializes in that loan. Not every bank on this planet wants to invest in small businesses; some actually don’t even want to go near them. There are however, many lenders that do; in fact, they do so much that they go micro niche. What that means is that they will actually specialize in a certain industry, such as construction and all the loans associated with construction companies.
The best way to find out who does what type of financing is a simple Google search or a quick visit to a particular lenders website. Many times, they will have all the information available on their site. If you’re old fashioned, you can always give them a phone call.
Some banks you run into are going to only do specific lending, so make sure you really shop around. Be prepared. After you speak with the loan officer make a face to face appointment if geographically possible. Real life meetings are much more effective than phone calls and video conferences. Remember, they are people too.
