Bizstartup.ie - NewsApproaching the bank

Bear in mind that a bank typically offers overdrafts and loans, not equity. This puts an onus on you to demonstrate that your business will be able to generate enough profits in cash to make agreed regular repayments on loans and that any overdraft will operate in order.

• A sound business plan should demonstrate the strategy for the business; what it sells, to whom, and how and when it will make a profit.
• Your proposal should include financial projections, including a cash flow forecast (what money will come in/out, from where, and when). These will show your borrowing requirement, plus your ability to repay borrowed amounts.
• Prepare yourself to answer questions on your plans, forecasts etc. especially the assumptions on which they are based. Give your bank good reasons to say ‘yes’.
• Demonstrate that you understand not just your own business but the competitive environment and market in which you will operate.
• Be honest and up-front. If you don’t offer up where the threats and risks are, an experienced lender will question where they may lie. 
• By all means, bring your business partner or advisors with you to the meeting, but be sure that you are on the same page by not contradicting each other.
• If you were lending someone money, wouldn’t you like to know how and when you should expect it back?

“No business plan is perfect, without risk or guarantees success. But it does form the basis for meaningful discussion and an objective assessment of the business proposition. Above all, it provides an opportunity to meet and assess the owners and managers of the business, who are the people who will make it happen,” says David Roberts, AIB Retail and Business Banking. “Banks make money by lending money, not by saying ‘no’. Despite the difficult environment, lenders will still seek to find reasons for saying yes to a well reasoned, commercially viable and potentially profitable loan application.”