Our guest blog post is from Michelle Goerdel, President of Biz Loan Link, a company that works with business owners to prepare presentations to banks that tell their stories. Michelle is an ex-banker and knows the ins-and-outs of the commerical lending world. Here she shares her insights on how to get noticed!
Banks these days are an interesting conundrum. Every lender I talk to says “We’re Lending!” Yet, when I bring in a company’s package to a banker, we’re getting turned down by an average of 1/3 of those same lenders before they even meet the owners. What’s the deal? I am an ex-lender so I should know better than anyone how to put a well-thought out presentation together. I have to say that some of it is simply that each bank and even each lender has different interests that change frequently, policy is still changing on a regular basis, and at times the lender just gets tired of getting excited about a deal only to have it shot down by credit That said, there are ways to significantly improve your odds of getting some sort of offer- the latest poll I read said that the number of banks the average number of banks a company talks to before they get a deal is 6-12 depending upon the industry and the area.
First, bring the bank a complete package of financial information at the outset. If you do that you will immediately get a better reception! Rather than listing out everything you need, I suggest going to the SBA website https://www.sba.gov/content/sba-loan-application-checklist and simply printing it off. There are links to several of the forms necessary to SBA loans including the personal financial statement, which you should also print off and use.
Next, write out a bio of the owners and the company. Its very likely you’ll be talking to a lot of banks to find one, rather than tell the story in full several times have that ready to go. Discuss the history of the company, the ups and downs, or as I like to say “tell them what happened, what you did to fix it, and what it will be like going forward. This is actually a great exercise for thinking as an outsider looking in- how would you like them to know your company’s story? A separate section of discussion specifically on the financials from the same perspective will decrease significantly the number of questions the lender will ask, saving you time and the headache of answering never ending emails or phone calls.
Finally, write out a list of your top ten customers and competitors. Who are they, why, and how do you plan to keep the customers and fend off the competitors? This is often a good exercise to do on an annual basis anyway but will show the bank that you are thinking and planning for the future, as well as helping them to fill out a fairly important part of their credit write up!
I recommend putting all of these documents on a CD and bringing to your meeting with the bank. Often the pile of paper tends to get shoved to one side of the desk until the banker feels he has to look at it, while if you give them a CD they get a much cleaner desk and they have to actually open the files to take a look. Once they are into it they will keep going, hopefully getting you an answer back much more quickly- especially if they can copy and paste directly from your documents into their underwriting package.
To sum up, the best way to get a positive reaction from the banks is to be prepared, have a complete package at the initial meeting, and prove that you think and plan for your business and learn from the ups and downs that any business experiences.