Bank loan providers want to see a proven track record before they lend you any money, but you can’t establish the track record until you get the loan. In order to get funded you have to know exactly what they are looking for?
Most bankers look at the five C’s:
- Character. What is your credit history. Have you been a good borrower?
- Capacity. Do you have any industry experience?
- Capital. How much money do you need? Is there a clear understanding of the amount of funds needed and where it will be spent.
- Conditions. What are the terms of the loan? The loan terms should be structured so that they can be paid back without overly restricting cash flow.
- Collateral. What can you bring to the table? In many cases, you should be able to provide up to 30% percent of your capital need in cash and/or other assets.
Bank loans are extremely difficult to obtain and they are usually only given to businesses with outstanding credit and a proven track record.