Obtaining a loan is a challenge that many entrepreneurs face during the first years of running their business. Whether you need money to fund a new project or to expand on an existing one, here are 5 tips for working with lenders that can help you seal the deal on that loan to put your idea into action.
1. Be Honest
Be honest with your lender about why you’re seeking a loan. A clear and upfront loan proposal can still be crafted in a way that’s appealing to the lender. No one wants to give money to someone who they perceive as trying to stretch the truth.
2. Be Transparent
A lender expects transparency with regards to your financial statements and other private business information. Be prepared to show them everything they would need to know in making a decision so that you are not caught off guard in the likely event that you are asked to open your books and records.
3. Be Open-Minded
Be open-minded when working with a lender to determine the specifics of a loan. Negotiations don’t work well when one side tries to dominate the conversation. Approach the lender with the terms and conditions that you prefer but don’t be entirely opposed to accepting a compromise.
4. Be Confident
Perhaps the most obvious deterrent to a potential lender is an entrepreneur who’s clearly uncomfortable or unsure of himself. Demonstrate confidence in your business idea and your loan proposal, and a lender will feel much easier about offering you money.
5. Be Aware
Demonstrate keen awareness when working with a lender to avoid getting the sour end of a deal. In the event that you’re unsure of what comprises a fair deal, you might be best off consulting a broker who serves as an intermediary between the borrower and the lender.
There is no magic formula that’s going to qualify your business for whatever loan you’re seeking. The majority of what impacts the lender’s decision will depend on measures that cannot be controlled. However, follow the aforementioned advice to give yourself the best chance of making that deal happen.