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Home  Funding Persuading the Bank to Invest in you
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Persuading the Bank to Invest in you |
From time to time additional funding may be required by your business to meet investment and growth plans. How do you convince a bank that you have a business worthy of investment?
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? I would offer 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.
Finally 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.
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Paul Gray Corporate Relationship Manager for Barclays Bank
07775 553048
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Barclays Bank
The Managers Club is sponsored by Employment Law Essentials
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