Bankers and the relationship with banks is changing due to the emergence of online banks which, through their modernity, brings a new way of exchanging between banks and customers. Proposals from banks continue to flow to customers and they can now without complex contact one bank and then another and put them in competition if their prices are not attractive.
In the process of creating your business or for the launch of a new project, you wish to obtain a loan from your bank. Not always easy to be granted this loan… So how to go about it?
What to keep in mind
The bank’s main activity is financing the economy through its public and private companies. It is above all a business, and like any business, it first seeks to optimize its profitability and above all to minimize its risk. To consolidate the structures in the event of a financial crisis, compliance with a certain equity ratio is imposed in relation to the loans granted.
This is why your bank is extremely cautious when applying for credit. It first rigorously analyzes the related risks. It is also possible that she shares it with as many partners as possible in order to limit the negative effects.
This makes it difficult for companies to obtain bank financing. Each banking institution has its own criteria for judging whether a credit application is acceptable or not and thus providing financial assistance to a company.
For the proper functioning of your business, you need this loan, so you will still persist… In order to put all the chances on your side, certain determining elements in the agreement or not of the loan are to be taken into consideration. The bank will judge your request according to these various factors.
The different categories of loans
There are 4 main categories of loans depending on your needs.
The medium or long-term bank loan is used to finance your new acquisitions as a priority.
Leasing makes it possible to finance the purchase of movable or immovable property. It includes a purchase option. Combining the bank loan and the leasing proves to be judicious if the amount to be financed slows down the bank.
Long-term leasing confers the possibility of leasing a property, but it does not include an option to purchase. Short-term credit, on the other hand, is intended to finance the business’s operating cycle. Your solvency guarantees must be reliable and certain. This type of loan is only for companies already created.
Training and work experience
In the eyes of your bank, your initial training, but also your professional experience, are an integral part of the factors to be taken into account. Depending on the nature of the project in question, a certain type and level of training and/or professional experience is required. Depending on the sector of activity, for the bank, you will be, in relation to these criteria, judge whether or not you are able to manage such a project. Opt for a project that is, as far as possible, linked to your level of training and professional experience.
A viable project
Generally, banks tend to finance projects of which they have a minimum of knowledge on the subject. Barring exceptions, loan applications for innovation and research are therefore more difficult to obtain.
To determine whether your project is viable or not, it must first be profitable. It is up to the bank to make this assessment, as for everything else, since it is up to them to make the final choice. However, take the lead by demonstrating the profitability of your project. Gather important information. You must present an activity forecast (balance sheet, tax income statement), in principle over 3 years, a document which plays an essential role in the choice of the bank. Regarding profitability, the fact that your project is profitable is not enough. This profitability must allow you to pay enough to be able to easily meet the various loan maturities, but also to leave room for maneuver for the development of your business. Also leaving a safety margin would be a plus. The hypotheses presented arising from your business plan must be as realistic as possible and linked to the WCR (Working Capital Requirement) which is determined by the difference between your stable resources and your stable jobs. To do this, rely on specific documents (quote, order commitment, etc.). Although it is not based solely on this criterion, the more guarantees you have, the higher the chances that your request will be accepted by the bank. rely on specific documents (quote, order commitment, etc.). Although it is not based solely on this criterion, the more guarantees you have, the higher the chances that your request will be accepted by the bank. rely on specific documents (quote, order commitment, etc.). Although it is not based solely on this criterion, the more guarantees you have, the higher the chances that your request will be accepted by the bank.