Question

If you were a loan officer at a bank and the owner approached you for a loan, what information would you require to help make your decision ?

Answer 1

1. Owner Personal and professional profile

The first thing a banker will be looking at is your character and previous business experience. the banker will be trying to assess your ability to manage the business.

2. The viability of your project

The first question the banker has to answer when looking at your business plan is: “How realistic is it?”

The viability of your project will be assessed in terms of the strengths, the opportunities and the risks presented in your business plan, including financial forecasts, the management team’s experience and the marketing and sales strategy.

You have to convince the banker that your business can become viable and that you are ready to take it there.

3. Your financial capacity

Having a solid credit history says a lot about your trustworthiness and ability to run a successful, profitable business.

A willingness to put a significant amount of money into your business will show your lender that you are committed to the project and willing to share the risk. The banker will also need to know how you are going to use the money, when and how you are going to repay your small business loan and whether there’s any security that can be pledged against it such as equipment, buildings or personal property. It might take two or three meetings to sort everything out.

4. Your knowledge of the market and the competition

The banker wants to see that you have built your plan based on a sound analysis that takes into account the market, the competition and the economic context. Do your own research and show that you know the trends, the opportunities and the risks.