Persuading the bank to invest in your business
Some Tips from Barclays Bank
There comes a time in a business' life when investment and
growth plans mean that additional funding is needed, and many
businesses choose to borrow from their bank. When such funding
is required, how can a business ensure that it presents a convincing
case to the bank and secures the right finance? Barclays offers
the following tips for businesses when meeting with their bank
manager.
First of all, you will need a good idea of the aims and objectives
for your business, as well as how you intend to cope with any
eventualities, all clarified in a business
plan. This gives the bank manager the confidence that you
understand your market and have thought about the development
of your business.
Present yourself positively and demonstrate your commitment
and enthusiasm for your business. Bank managers place a great
deal of importance on this when assessing proposals.
Demonstrate that you have the appropriate experience, training
and drive to plan and run your business effectively. An up-to-date
copy of your Curriculum Vitae will provide evidence of your
abilities.
Show that you have the ability to produce up-to-date and accurate
financial information to reassure the bank about your control
over the business. It is important that you know its current
position.
Explain in detail your reason for seeking bank funding. This
will enable the bank to inform you of the most appropriate type
of funding to meet your business' needs.
Ensure that you establish the correct amount that needs to be
borrowed, allowing for unexpected expenses. Borrowing too much
will cost you more interest than you need to pay, and too little
may mean you need to return to the bank at a later date.
Be clear about the source of repayment. Develop cash
flow and budget forecasts that accurately show what you
expect to happen to your business over the period of your facility
and outline the sources from where you expect repayments to
be met.
Protect yourself and your business. Take steps to protect the
repayment of your loan, in case you are unable to meet the cost
of borrowing from normal trade due to unforeseen circumstances.
This may mean taking out insurance
to cover you and key personnel in the event of an accident or
illness.
Barclays says: "We endeavour to be open and honest in our dealings
with our customers and are always keen to explain how we assess
business proposals. Bank managers look first and foremost at
the character, ability and experience of the business owner
and the cash generating capacity of the business itself. In
this respect, it is essential to stress the importance of proper
planning and forecasting before any meeting with the bank manager."
Alternatives
If the bank won't lend you money, a finance broker may be able
to find an alternative source of finance.
Find a finance broker
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