What do banks look for when evaluating a business?
To summarize the criteria they attempt to estimate the following:
- The ability of the borrower be able to repay the requested loan.
- If the loan is not repaid - the alternative means for the bank to get its money back.
- Your total value as a client.
Banks will evaluate the criteria in the following manner:
- They will examine not only your business, its products, marketplace, pricing, growth, but also you and any other management team.
Your credit history will be evaluated along with their impression of you as a business manager. Their points of interest in evaluating your business are your historical financial statements, for an existing business, and your business plan. Your plan must persuade the lender that you have a solid strategy for success and will be capable of repayment.
- They will consider available collateral. If your business fails, the bank will seize the property you pledged to guarantee the loan. Generally if you don't have collateral you don't get the loan. SBA loan programs are intended to alleviate this concern as the Government steps in to supply this guarantee.
- Generally a bank has no desire to make a small business loan unless the client is willing to move other accounts to that bank.
Review our record with the BBB by clicking on our link to the right. We are a working partner with the Small Business Administrations - serving as a Technical Assistance Provider (TAP program).
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