One of the first hurdles many entrepreneurs must clear is accumulating sufficient capital resources to help get a new business venture off the ground. Securing financing on your own, however, isn’t always easy.
Lenders are readily looking to lend capital, but studies show–as we have so often heard from our lending sources–that borrowers too often fail at the preparation and presentation level. If your loan preparation and presentation are inadequate, your application isn’t going far and isn’t likely to be approved.
The reasons for this are varied. Beginning with the most basic violation, often borrowers fail to clearly articulate their need for the loan, or they simply might fail to provide an executive summary. While this may seem elemental, it is unfortunately more common than you may think.
Additionally, a borrower’s credibility is an important concern for lenders, and failing to disclose everything may prove costly. A recent potential client inquired about suing a local bank for discriminatory lending practices after failing to secure a loan. As we uncovered the facts, however, we learned that the applicant borrower failed to disclose a judgment from a few years back. He had no case.
These are just two common examples of potential business borrowers that are self-sabotaged, which is unfortunate because there are billions of dollars just sitting on the sidelines in the hands of otherwise incentivized lenders.
Novice borrowers are commonly penny wise and pound foolish, submitting loan or credit line applications without objective third-party input. To help facilitate the lending process, call on a trusted adviser or someone experienced with commercial lending. The time or money spent can greatly increase one’s odds of a successful application, and will often lead to introductions to a deeper pool of lending sources.