Bank loans have become a huge necessity for many reasons. If building a business is your objective, you already know that cash flow is the lifeblood of business. Beyond businesses, however, bank loans are essential for less professional reasons like the need to buy a house or a car.

As is the case with every other thing that is associated with competition, there is the need to approach banks in a certain way that has been associated with successful outcomes. There is a “how-to” of getting bank loans and this is briefly discussed below.

Ensure you approach the right bank. Doing some preliminary research before deciding which banks to approach will not be out of place. The objective here is to determine which banks have been known to give out the kind of loans you seek. For instance, Nigeria’s Bank of Industry (BoI) will be more interested in dishing out loans that will be used for building businesses than loans for personal reasons. For the latter, retail banks work best. In determining what bank(s) to approach, ensure you consider their overall vision, mandate and track record as these are big pointers to what kinds of customers they serve and, of course, the sort of loans they will be open to offering.

Prepare to “sell.” Be sure to clearly explain the rationale for the loan in such a way that the bank considers your project as big a win for them as it is for you. For a non-personal loan, do your homework and enter into the meeting with fact-based projections, audited accounts statements and the like, do not underestimate the need to show that you know what you are talking about.

Be Ready to Answer Questions. Money, albeit a commodity, is very precious and people would usually not part with it except for compelling reasons. When it comes to seeking loans, be ready to face a panel that will ask questions. So, get comfortable talking about risk assessments, the ability of the business to generate sufficient payback in record time, and, of course, what happens if, due to contingencies, your plans misfire. Collateral security is key, therefore, you have to be ready with contingency plans.

Look the Talk. Banks will be interested in getting to know the personality behind the proposal, so it’s worth it to dress the part and convey an image that assures the lenders that their money will be in good hands. Having an already existing account with the bank may prove to be a plus as the managers can more readily assess your credit history and overall fiscal behavior.

Do not jump the gun. Be prepared to go through the process. Instead of looking for ways to short-circuit it, focus, instead, on exceeding expectations at each stage so your proposition becomes very attractive and compelling. Ensure you do not appear desperate in the process of trying to be serious.

While every bank will have limited allocations for loans and the like, a bigger reason for loan failure is the lack of properly packaged bankable propositions that show the right indicators. Be sure to incorporate these recommendations when next you hit the loan route.

By Emmanuel Iruebo

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