Critical Questions
Before you go to meet with a bank or credit union, it is a good idea to call and ask them a few questions about their business lending history. After you have chosen a few banks to meet with, you can call and ask questions like:
- What types of business loans do you offer?
- Do you only make business loans of a certain size?
- What is your application and review process?
- How long does it generally take to fund a loan?
- What is your approval rate for business loans?
You can use the answers you get to prepare the best loan package for each bank. When you are preparing to meet with your lender, you should keep some critical questions in mind to increase your chances of successfully obtaining a loan. Any materials you prepare should answer the following questions:
- How much are you looking for?
- What will the money be used for?
- How will the loan benefit your business?
- When will you pay back the loan?
- How will you generate sufficient cash flow to repay the loan?
- Are you a good credit risk?
- What happens if your business fails and you can't repay the loan?
- Most of these answers should be readily available, particularly if you have carefully prepared a business plan and a financial loan package, but it's always best to make sure the answers are clear in the materials you present.
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