If you are looking for a bank loan to start a business, the first step is to learn how to contact the banker the right way.
But how do you approach a lender? How do you prepare to increase your chances of getting a loan? What do you need to present? What are the questions to ask? What will they ask you?
According to the “Understanding Commercial Lending Handbook” of the Illinois Department of Commerce and Economic Opportunity, here are the first steps that you need to take in contacting a lender:
- Call the commercial lending department (or a bank’s branch) to find out the business loan rules.
- Ask if the lender is looking for loans of your size and type.
- Ask for a loan application.
- Prepare all the requested documents and include a business plan.
- Make an appointment.
- Rehearse your presentation.
To help you prepare for the meeting, it is important to anticipate the questions that lenders typically asks from borrowers. Here are some basic questions to consider:
- How much do you want? How will the loan be used?
- How long will it take to repay the loan?
- What collateral do you have to offer?
- How much are the owners investing in the business?