Bank Loans: Getting to Know Your Lender

You, like, Martin Luther King, have a dream and now you are looking to finance that dream. The question of funding is often addressed through a loan, and the person safeguarding those loan funds is a lender. Somehow that word, so seemingly innocent, can strike fear into the hearts of so many entrepreneurs, especially if they are just starting out. Don’t succumb to that fear, but brave the terror with an unlikely weapon - facts.

The fact is that lenders are people too, business people, which should make it easier to understand what exactly they are looking for in a borrower. They want to to see a quality investment that will give them a quality return. Both the lender and the entrepreneur will be asking similar questions such as: How much return will I get off this investment? What is my backup if this fails? Do I find this person/owner/ investor to be reliable? Ultimately, they want a business such as yours to succeed, as it would benefit them as well.

The idea of being on common ground with your lender can seem foreign, but is probably the most accurate depiction of the relationship. Lenders will be a large part of your business for some time, or at least until the loan is paid off. They will be by your side, analyzing quarterly reports, and checking on how the business is doing right alongside you. Try to think of this as a positive; it’s like having another player on your team.

The sport metaphor is apt as in a manner of speaking you both recruited each other. As a borrower, you research the various lending institutions in order to find the best suited to your needs. And conversely, a lender researches your background credit history and analyzes your game plan, or business plan, in order to assess what kind of investment you would be.

Lenders want to know what you bring to the table in many ways. Available collateral, business acumen, and past history will all play a role in this. As a borrower, you want to make sure you project an image that is most desirable to the lender. In order to do this, you’re going to have to do your homework. Anticipate the lender’s moves in order to improve your game plan. This will include such things as checking your credit report, knowing what information lenders require & the loan process, knowing what financial ratios are important to them, and what types of collateral that is acceptable.

In the following articles, you will be delivered a thorough explanation on the topics mentioned above. The goal is to get you into shape and prepare you for the rigors that are involved with attaining your dream. It won’t be easy, but if you wanted something easy, it is doubtful you would be pursuing avenues to make your entrepreneurial vision a reality.

About the Author:
Aaron Dyer is President of Dyer Consulting Group, a small business consulting firm that advises business owners on ways to grow their revenues and increase profitability through better strategic planning and financial management. With over a decade of lending experience, Aaron can help your business navigate the loan application process and find the right loan to fit your needs. For more information, and also to sign up for Aaron’s future articles, visit http://DyerConsultingGroup.com