Business Loans
 |
Geoffrey A. Talcott,
Senior Vice President
and Chief Lending Officer |
Dear Salisbury Banker:
When I go to my bank for a business loan, what are they going to be looking for?
GETTING MY DUCKS IN A ROW
DEAR DUCKS:
It's smart to be prepared in advance. In fact, bankers look at many factors. The first is cash flow. They want to be sure that there's enough cash coming in to the business (income) compared to what's going out (expenses) to cover the loan payments (service the debt).
Second, they look at the business itself. Does your company have a promising future? Do its products or services fill a niche for which there is a demand? What is the competitive landscape? How might market conditions or other forces change the future picture?
Third, they will want to know how you plan to use the money. Be prepared to answer a number of relatively simple questions. Will this loan allow you to increase your revenues enough to make it a smart business move? Is it a prudent use of funds, or are you trying to expand too quickly? Will the planned course of action take away from your existing core business in any way?
Fourth, they'll look at your company's history, including how long you've been in business. Has your business asked for and been given credit before? What's your track record? Be prepared with financial information, including tax returns, list of assets, schedule of debts, and accounts receivable and payable.
Finally, they will look at your personal financial history. They'll want to know that you can repay your debts in a timely fashion and will avoid getting overextended.
Most of all remember, your banker wants to make you the loan you are looking for.
Geoffrey A. Talcott, Senior Vice President and Chief Lending Officer
Do you have a question about business loans?
Please contact me at Banker@salisburybank.com.
This information is provided for informational purposes only and does not constitute tax or legal advice. Always refer to your tax advisor for guidance for your particular situation. Opinions expressed herein are subject to change without notice. Information has been obtained from sources believed to be reliable, but its accuracy and interpretation are not guaranteed