Responsible for keeping money safely deposited, the bank is subject to prudential rules. As such, it must be able to assess any type of risk. However, during the establishment phase, a company has a real potential risk for the banker. For this reason, you must convince him that you will keep your financial commitments.To build your business, you will need the necessary funding for:
- Your investments in plant, equipment or raw materials;- Operation of your business (paying your employees, paying your own salary, payment of expenses for social welfare agencies and pay your overhead - rent, telephone, advertising, transportation, financial expenses, taxes ...);- The development of your business (studies, establishment of a decision or training ...).Among the possible sources of funding, bank loans are often long-term solutions for many projects.
Responsible for keeping the money safely deposited, the bank is subject to prudential rules. As such, it must be able to assess any type of risk.
However, throughout the creation phase, a company has a real potential risk for the banker. For this reason you must convince your interviewer that you keep your financial commitments.
It is therefore necessary to prepare a strong case and guarantees attractive. Remember that your banker will consider the relevant indicators.What interests your banker?
You must highlight many strengths.
1. The relevance and potential of your idea
Your banker will want to know if your idea is relevant and, ultimately, whether it can generate profits. It will be interested in the highest degree by your market research to assess whether the idea is adapted to the market, where many potential customers, if competition is high or low. He will not hesitate to ask the following questions:- Your product or service he answers a real need?- Your idea is it ahead or behind the market?- Are you really the only one with this idea?- Is your project innovative?- Do you have a chance to be a leader in your market?- What are your competitive advantages? ...
2. The viability and feasibility of your project
Contrary to popular belief, obtaining or providing guarantees of a security criteria are not showing your banker that he can have confidence in the viability of your project.You must be quite capable of knowing what are the elements of the forecast balance sheet, income statement or estimate of the liquidity plan. Your credibility will go through the mastery of the financial part of your business plan.
Expect Soyer and ready to answer questions like:- Your account is projected results credible?- What is the weight of your overhead on operating income?- Your equity is sufficient? ...
By asking these questions, your banker will look at whether, for example, your production costs are too high relative to estimated turnover.Moreover, the higher your equity is important, the better, ideally they represent 50% of funding, although in practice this rate is more like 20 to 40%. In addition, the contribution is considered better when it arises from the personal contribution rather than a homemaker or a grant.
In addition, the bank will protect with technical safeguards. There are mainly:- The pledge of the production tool or investment that is the subject of funding;- Personal guarantees, much appreciated by bankers, but can be dangerous for you.
3. The adequacy personality of the creator / creation project company
The human factor is not to neglect to build a trusting relationship with your banker. You must show your motivation high, focus on your managerial skills and organizational and prove that you are familiar with your project.Your banker will linger on your way to systematically validate the adequacy of your profile with the proposed establishment.At this time, you can reassure him by:- Your charisma. Leadership skills, perseverance, physical energy, work capacity, mental balance;- Your resources. The banker is interested both in your professional, business experience and skills in the art that family indebtedness, agreement around you ...- Your transparency. Establishing your company's accounts in accordance with the accounting and legal framework is essential because it is from these documents that your banker will determine if your business is a good investment or not, and will eventually take its decision.
How to negotiate with your banker?
Bankers often have very little time for you. It is therefore very important to:- Provide a good record (complete, clear and precise);- Be credible and powerful at the interview (master all the concepts of the business plan, like the notion of need in working capital (working capital), income statement, cash flow plan ...);- Be knowledgeable about the banking environment.
1. Prepare your file
Your file is one of the factors of success in negotiating with your banker. It is vital that it is of excellent quality, both in substance and in form.Play the card of transparency vis-à-vis your banker by providing your business plan.Highlight the key points of your market research: market, product or service, target audience, positioning relative to competition, pricing, sales forecasting, sales actions, strategies for differentiation ...Show your team (role, strengths, value added, ... CVs), including you, to highlight the suitability of these profiles with your project.And also introduce potential hires that you intend to medium term.Feel free to attach a chart of your company, your legal status, your shareholding structure and analysis of economic aspects, fiscal and social.Finally, remember the financial section: Table of investment, initial financing plan, income statement for the first three years, working capital requirement (WCR), plan cash-on-year, calculating breakeven or neutral and financing plan for three or five years.It is wise to complete your file by other appendices: sales literature, a glossary of technical terms, patents and trademarks, contracts with major customers and suppliers, strategic partnership agreements ...
2. Prepare your interview
It is strongly recommended before any maintenance training to present your project orally. Winning the confidence of your bank requires a good speech and a persuasive argument. Treat his posture and attire also includes the day of the interview.To sit your credibility, play the card of the dialogue. Speak first to discuss your project and try to keep as much control as possible trade.By combining transparency and dialogue, you will come to a position of equals that will legitimize your requirements in terms of amount of credit, guarantees, various fees and interest rates.At the end of the interview, you must derive information about the decision of granting credit and under what circumstances or under what timescale.
3. Some practical tips
a) Find
Before making contact with various banking institutions, keep informed of current bank. Be aware of developments in the banking world will help you define your strategy for solicitation.Know the bank where you go, his interests in business creation, its forms of loans, business strategies are all part of hook to catch the attention of the banker asked early in the interview.
b) Tell the bank
Suppose you have got your bank loan. Your banker always imagine the worst when it is no news. To avoid this, it is essential to regularly inform and to prevent potential problems before they occur.Your banker will ask for a regular consultation of your accounts (balance sheet, income statement, cash flow). It is good to send all the positive information also available (press releases, new customers, development opportunities, invitations to shows ...).In a crisis, you'll need your bank gives you a little time. But that requires trust. These have been well established by the continuous flow of information to your banker. This small advantage may make a difference and save the life of your business.
- Your investments in plant, equipment or raw materials;- Operation of your business (paying your employees, paying your own salary, payment of expenses for social welfare agencies and pay your overhead - rent, telephone, advertising, transportation, financial expenses, taxes ...);- The development of your business (studies, establishment of a decision or training ...).Among the possible sources of funding, bank loans are often long-term solutions for many projects.
Responsible for keeping the money safely deposited, the bank is subject to prudential rules. As such, it must be able to assess any type of risk.
However, throughout the creation phase, a company has a real potential risk for the banker. For this reason you must convince your interviewer that you keep your financial commitments.
It is therefore necessary to prepare a strong case and guarantees attractive. Remember that your banker will consider the relevant indicators.What interests your banker?
You must highlight many strengths.
1. The relevance and potential of your idea
Your banker will want to know if your idea is relevant and, ultimately, whether it can generate profits. It will be interested in the highest degree by your market research to assess whether the idea is adapted to the market, where many potential customers, if competition is high or low. He will not hesitate to ask the following questions:- Your product or service he answers a real need?- Your idea is it ahead or behind the market?- Are you really the only one with this idea?- Is your project innovative?- Do you have a chance to be a leader in your market?- What are your competitive advantages? ...
2. The viability and feasibility of your project
Contrary to popular belief, obtaining or providing guarantees of a security criteria are not showing your banker that he can have confidence in the viability of your project.You must be quite capable of knowing what are the elements of the forecast balance sheet, income statement or estimate of the liquidity plan. Your credibility will go through the mastery of the financial part of your business plan.
Expect Soyer and ready to answer questions like:- Your account is projected results credible?- What is the weight of your overhead on operating income?- Your equity is sufficient? ...
By asking these questions, your banker will look at whether, for example, your production costs are too high relative to estimated turnover.Moreover, the higher your equity is important, the better, ideally they represent 50% of funding, although in practice this rate is more like 20 to 40%. In addition, the contribution is considered better when it arises from the personal contribution rather than a homemaker or a grant.
In addition, the bank will protect with technical safeguards. There are mainly:- The pledge of the production tool or investment that is the subject of funding;- Personal guarantees, much appreciated by bankers, but can be dangerous for you.
3. The adequacy personality of the creator / creation project company
The human factor is not to neglect to build a trusting relationship with your banker. You must show your motivation high, focus on your managerial skills and organizational and prove that you are familiar with your project.Your banker will linger on your way to systematically validate the adequacy of your profile with the proposed establishment.At this time, you can reassure him by:- Your charisma. Leadership skills, perseverance, physical energy, work capacity, mental balance;- Your resources. The banker is interested both in your professional, business experience and skills in the art that family indebtedness, agreement around you ...- Your transparency. Establishing your company's accounts in accordance with the accounting and legal framework is essential because it is from these documents that your banker will determine if your business is a good investment or not, and will eventually take its decision.
How to negotiate with your banker?
Bankers often have very little time for you. It is therefore very important to:- Provide a good record (complete, clear and precise);- Be credible and powerful at the interview (master all the concepts of the business plan, like the notion of need in working capital (working capital), income statement, cash flow plan ...);- Be knowledgeable about the banking environment.
1. Prepare your file
Your file is one of the factors of success in negotiating with your banker. It is vital that it is of excellent quality, both in substance and in form.Play the card of transparency vis-à-vis your banker by providing your business plan.Highlight the key points of your market research: market, product or service, target audience, positioning relative to competition, pricing, sales forecasting, sales actions, strategies for differentiation ...Show your team (role, strengths, value added, ... CVs), including you, to highlight the suitability of these profiles with your project.And also introduce potential hires that you intend to medium term.Feel free to attach a chart of your company, your legal status, your shareholding structure and analysis of economic aspects, fiscal and social.Finally, remember the financial section: Table of investment, initial financing plan, income statement for the first three years, working capital requirement (WCR), plan cash-on-year, calculating breakeven or neutral and financing plan for three or five years.It is wise to complete your file by other appendices: sales literature, a glossary of technical terms, patents and trademarks, contracts with major customers and suppliers, strategic partnership agreements ...
2. Prepare your interview
It is strongly recommended before any maintenance training to present your project orally. Winning the confidence of your bank requires a good speech and a persuasive argument. Treat his posture and attire also includes the day of the interview.To sit your credibility, play the card of the dialogue. Speak first to discuss your project and try to keep as much control as possible trade.By combining transparency and dialogue, you will come to a position of equals that will legitimize your requirements in terms of amount of credit, guarantees, various fees and interest rates.At the end of the interview, you must derive information about the decision of granting credit and under what circumstances or under what timescale.
3. Some practical tips
a) Find
Before making contact with various banking institutions, keep informed of current bank. Be aware of developments in the banking world will help you define your strategy for solicitation.Know the bank where you go, his interests in business creation, its forms of loans, business strategies are all part of hook to catch the attention of the banker asked early in the interview.
b) Tell the bank
Suppose you have got your bank loan. Your banker always imagine the worst when it is no news. To avoid this, it is essential to regularly inform and to prevent potential problems before they occur.Your banker will ask for a regular consultation of your accounts (balance sheet, income statement, cash flow). It is good to send all the positive information also available (press releases, new customers, development opportunities, invitations to shows ...).In a crisis, you'll need your bank gives you a little time. But that requires trust. These have been well established by the continuous flow of information to your banker. This small advantage may make a difference and save the life of your business.
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