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How to get a bank loan to start your own company


If you intend to borrow money in a bank, it's important that you are prepared. Banks are not lending ventures. Banks want to be 100%, or better still 150% confident, that you will give them their money back and that they also make some money. The bank will want to have good collateral, such as mortgage on your property, securities. They will also evaluate you as a person and look very closely at your business. Start by visiting your own bank, but don't settle with that. Examine different banks' terms before you decide. It's easy to feel intimidated in contact with the bank, but hold your head high and be a little cocky. Remember, they don't lend you money to be nice to you. They do it to make money and they will require that you pay your dues on time, whether your business is doing well or not.

Questions they might ask:

What if ...:
• You are not selling as much as you think?
• You get sick?
• Customers don't pay?
• Suppliers don't give any credit?
• A large customer suddenly chose another supplier?

If a bank asks you these kinds of questions, you have come across a good bank that will help you in your business. Unfortunately, you can't count on the bank's staff being so dedicated. Often they are like most people, quite afraid of making mistakes. They often work according to set templates and your job is to not miss any little detail that can make them anxious when they are going to evaluate you.

When meeting at the bank, bring:
• Telephone numbers for references they can call.
• A detailed business plan that you know inside and out.
• A marketing plan that you know inside and out.
• An investment plan.
• A starting budget.
• Clear reasons why the bank should believe that you will be successful.
• Cooperation plans with other business owners.
• Collateral for the loan.
• Plans for the coming year.
And remember to be nice, polite and well-dressed.

There are two different kinds of loans you can get from a bank:

Investments
Money for machinery and equipment.

Operating credit
Overdraft facilities are used in support of your business operations. A certain sum, for example 100 000, will always be available on your account for major expenses. You pay for the opportunity to use the money and if you use it, you pay interest on the amount you use.





About the author

Stefan Ekberg has worked in marketing for small business for 20 years and has written around 30 books on how small business owners can market themselves with limited resources. . In 2012 Stefan was nominated as Entrepreneur of the Year in Stockholm.

230 000 prescribes to his free newsletter "The 5 minute marketer"
Every week some 230,000 prescribers gets his free newsletter about 5 minute marketing.

"The 5 minute marketer" - the book
You run a small business and you want to get ahead of the competition, but how can you give resources to marketing when you're short on time and the budget is tight? The solution is here! The 5-Minute Marketer is packed with 395 tried-and-tested ways to market your business in 5 minutes or less.