How to Prepare to Meet with Your Lender
Want the inside scoop on strategies to improve your chances of securing a business loan? At Grandpoint Bank, we are always focused on how to help our clients succeed, so we’re happy to share our experts’ advice. Stephen and Jim have helped businesses throughout Southern California and beyond secure loans and lines of credit.
“If you’re looking to become bankable in the next year, open up a conversation with your banker now,” says Stephen Friedman, Executive Vice President/Regional Manager at Grandpoint’s San Diego-based division, Regents Bank. “Approach your banker with the right questions to find out how they look at cash flow, collateral and your unique risk elements. Even if they can’t lend you money now, they can at least define specific credit guidelines, providing you the tools to make your business bankable sooner.”
When you’re ready to walk in the door to seek funding for your growing business, make sure you’re prepared, cautions Stephen. “Before you apply for funding, know your business inside and out and have a roadmap of where your business is going – financially and strategically. Know what you want so that you can express your vision to your banker before you apply for a loan or line of credit.”
Our funding experts agree, don’t be afraid to think of your banker as a consulting partner for your business. “We want to build a relationship in which you can openly discuss your strategic plan and seek advice from your banker about how to get there,” says Jim Hackbarth, Executive Vice President and Regional Credit Administrator for Grandpoint Bank’s Los Angeles region. That familiarity and understanding is critically important when you’re ready to apply for credit.
“If you are not an existing client, we’ll sit down with you to talk about your business so that we have a better understanding of your company and your objectives,” says Jim. “That will help us when we do our preliminary review of your loan request. We’ll also talk with you about the kinds of financial products and services you currently use and how you can get the most value from your relationship with Grandpoint. Before finalizing our evaluation of your loan package, we will schedule a site visit to even better understand your business.”
For both new and established clients, when it’s time to submit a loan application, Jim says be sure to include the following:
- Biographies/resumes of the owner(s)
- Ownership structure
- A discussion of management succession
- A discussion of business strategy and marketing strategy
- A discussion about suppliers and supplier risk
- A brief analysis of the competition
- Sales or customer concentrations
- A clear outline of your financing needs
- Three years of tax returns or CPA-prepared financial statements and a recent interim financial statement
- Three months of bank statements
- Accounts payables and account receivables – current and aging
- Three years of projections
- Disclosure of any government regulatory exposure
- Entity documents (Articles of Incorporation, partnership agreements, etc.)
Both bankers agree: make sure your financial statements, including your balance sheet, are detailed. “You don’t want to present your banker with financials that look like a smile with missing teeth,” cautions Stephen. And remember, the best business banking partners can offer resources, experience and connections for your business that are often just as valuable as the money they lend.