Banks are still and always the first financiers of companies and the privileged interlocutors to obtain professional financing. If you are about to start your business, you will probably have to ask your bank for a loan. Here’s a handy guide to knowing everything about bank financing and convincing your banker to give you the credit you urgently need.
What can your bank do for your financing?
You have a well-crafted project, with all the keys in your hands to succeed, but you need funding? There are now several possible sources of funding for your fledgling business, such as love money, fundraising, crowdfunding, etc.
But there are also banks. One could even say: first there are the banks. One of the fundamental missions of banks is to finance the economy, and therefore businesses . The main function of banks is to grant loans to businesses. If you want to get credit, it’s first to your bank that you have to turn .
But how to get a business credit from your bank?
How to obtain bank financing?
A bank needs collateral. In order for her to give you credit, she must be sure that your project is on the road and that it is credible . The bank is a business and, like all companies, seeks to minimize its risks and maximize its profitability. The bank will investigate whether you are able to repay the loan .
With this in mind, the bank will focus on two points :
- To your profile : Do you have experience in entrepreneurship? Do you have any special training in this area? Do you have a good financial situation? Are you really motivated? The bank will check all these points during the interviews. You must be convincing and be completely comfortable with notions of working capital requirements, income statement, financing plan, cash flow plan, etc. This is why we will explain these financial and accounting concepts very soon.
- To your project and its profitability forecast : the project, in itself, is it relevant? Is there a real demand for the products you want to sell? Are the hypotheses retained credible? Is your forecast realistic? To ensure all these points, the bank will ask you for a business plan , that is to say a document that presents your project and its financing plan. Your project must be convincing.
To obtain a loan, the business plan is an essential document . We will publish soon an article on the subject which will explain you in detail what should contain this document.
Good to know: following a request for a bank loan, the bank’s response time usually varies from one week to one month.