The good news is that Banks and Lenders are opening up their coffers to provide business credit financing. The other news, that’s more anticipated than “bad,” is these Banks want business owners to answer some tough questions about preparedness for further pandemic-related challenges.
If you are applying for business financing—a loan or line of credit—that’s not Disaster Relief-related, here’s a sample from one of our Bankers on what to expect:
- How has your business been impacted throughout the crisis?
- How have you and your employees been affected? Your suppliers? Your customers?
- What are your key priorities over the next 30/60/90 days?
- How do you anticipate accomplishing these goals? What hurdles do you anticipate?
To achieve a successful response to your application, you should answer these questions with all appropriate gravitas and extreme detail.
- The Bank wants to know that, should the pandemic-related lockdowns get tighter:
- How have you planned to get through that?
- Do you have cash reserves?
- An employee-furlough action plan?
- Do you have the ability to provide your services or products with a serious downturn in customer traffic (think early days of lockdown)?
Banks make loan decisions by assessing the risk on the credit profile of the Borrower. As with any aspect of a loan application, the COVID-19 pandemic has created another layer of risk for Banks. Your successful loan application will take that risk assessment into account as you prepare your application for submission by anticipating how to make a Bank/Lender get into a “comfort zone” about your ability to make payments on the loan as other challenges from the pandemic arise.
Download our documents checklist so you’re properly prepared. You have to be better than the lender because they’re trained to say “NO THANK YOU”.
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