Going to Need a Business Loan?


Aug
30
2018

As you grow your business, you’re likely going to run into a ceiling at some point during the process that just about every business has to come to terms with: money. When you’re ready to make that big expansion, you’ll want more cash than you have on hand. At that time, you’ll want to already have a relationship with your bank.

Building that relationship takes knowledge, not just of your own business needs, but of each bank’s particular needs and obligations as well. Here are the first few steps you should take to equip yourself with what you need.

Understand how banks work

A bank isn’t just a place that holds your money and cashes your check from time to time. Banks have their own responsibilities to worry about, including government regulators and the local economy and community that rely on them for their services.

If you understand such responsibilities exist, you can come prepared to listen to what it will take to make a great relationship with your bank - borrowing money and paying them back will make for a long-term relationship.

Choose a bank that is right for your business

Like any business, banks come in a variety of sizes and specialties. In most circumstances, you’ll need to borrow from a bank that is local to your business and one that at least matches your own business in size. Banks that are far outside of your location are usually less willing to provide a loan because of the additional costs associated with checking credit or collecting a default loan. And for banks that are much larger in size, it can be difficult to convince them you’re worth the time and money, especially if you’re a small or start-up business.

You’ll be able to find a bank in your area that specializes in business-lending that are not only willing to make the loan but have the expertise and support to assist you throughout the process when necessary.

Build trust over time

It might seem like a difficult factor to account for when you’re planning to take out a business loan but having a long and trusted relationship with the bank you want to borrow from makes it that much easier to secure the loan.

To do this properly, you need to plan well ahead when it comes to your business goals. Identify the bank you would want to borrow from well before you’re even considering expanding your business. You can get to know the lenders at this bank and even take out and repay a few small loans for your business in order to build that trust, show that you keep your word, and demonstrate that your business is reliable.

Next blog, we’ll take a look at the numbers and documentation you’ll need to demonstrate you’re a safe bet for the loan. Do you have any borrowing stories or tips that you’ve encountered in your business? Let us know at info@quincycfo.com.




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