BoeFly, the online exchange that successfully connects business borrowers with the over 2000 participating lenders, has analyzed the financing requests posted on its marketplace and has identified the following key elements necessary for obtaining small business loans on the best possible terms:
- Be Prepared – First impressions count, submitting a “bank ready” request may very well determine whether a banker wants to proceed! When they first look at your financing request it should provide a brief summary of the transaction including; (i) loan purpose, (ii) loan amount, (iii) type of business, (iv) debt service coverage, (v) primary collateral and loan to value, (vi) debt to worth ratio, (vii) management experience, (viii)Credit Score. The loan summary may get your foot in the door but you must be prepared to provide complete back up to the summary information.Business owners are turning to the online loan marketplace, BoeFly to receive all the tools to create and submit ‘bank ready’ requests to multiple interested lenders.
- Cast a wide net (without risking your personal credit) – Every business borrower wants to get the best possible terms (lowest rate, longer term, lower monthly payments, etc.). So it’s critical to connect with as many lenders as possible.However, every time a borrower applies at a bank they eat up precious time and money (in printing expense and postage fees). Furthermore, each time a business borrower applies for a loan the bank will obtain a credit report which can negatively impact the owner’s credit score. By using an online marketplace like BoeFly a business owner is able to cast a wide net and get in front of hundreds of lenders who won’t pull credit until the lender and the business owner know they want to move forward together. The more lenders a business owner connects with, the better the terms for the business owner. In addition Boefly’s tools provides the business owner with links to obtain their credit score without impacting their credit rating and also provides the tools for creating a comprehensive “bank ready” loan package as well as a template for creating a Business Plan.
- Be realistic and think like a banker – You need to be realistic when you are seeking a business loan. Think like a banker and ask the banker’s top questions, “Is there a clear vision as to how the business will pay back the loan? If things get tough, is there a fallback position? Does the borrower have management experience and good credit history? Does the borrower have ‘skin in the game’ i.e. money at risk?” BoeFly has obtained and compiled the lending preferences from its participating lenders in order to efficiently match loan requests with interested lenders. Use Boefly’s free fundability wizard to determine the strengths and weaknesses of your request and see how you can improve our chances of obtaining a loan on favorable terms.
- Respond timely – When you are engaged with a banker you should expect clarifying questions before a loan is approved. It is very important to respond to these inquiries in a timely manner. Bankers deal with numerous loan requests, if you are slow in responding to a banker’s inquiry, you may lose momentum and the banker’s attention and interest.When a borrower is slow in responding, it causes the banker to ask, “Is this borrower serious? Do I want to invest my time into understanding this business, or should I just move on to the next?” Providing quick answers to your banker’s questions is your best path forward.
- Be your own salesperson – Small business bankers have an almost endless supply of business borrowers seeking financing. Business owners that successfully secured loans were able to convince the banker that they and their business were credit worthy. Clearly financial analysis is critical to the loan making decision, but there is also the need for an owner to enthusiastically sell the banker on their business. This is done in the accurate and complete presentation of information clear articulation of your vision (perhaps in your business plan) but also on the phone and, if possible, in-person interactions. If you believe in your business and are enthusiastic about its prospects make sure the banker knows it!