How to get a ‘yes’ from the bank

How to get a ‘yes’ from the bank

Lending to small businesses is still restricted, with latest figures from the Bank of England showing that although business lending was up overall in the three months to September, smaller companies are missing out (1).

But for many small businesses, growth and expansion are out of the question without a cash injection, so here’s our top tips for getting that elusive ‘yes’ from the bank, even in difficult conditions.

Have a strong business plan

A solid business plan is the first thing banks will be looking for when making the decision about whether to lend to you. Spend time developing a clear, concise plan which includes details of how your business will grow, what impact market changes could have on your plans and exactly what you will spend the loan on. Make sure you triple check any figures you have included.

Improve your credit rating

Even if you have no plans for expansion now, there may come a time when you do and you’ll have a better chance of getting funding if you have a good credit record, so make sure you pay all bills, both business and personal, on time. Businesses can also boost their credit score by filing full rather than abbreviated accounts with Companies House and making sure all accounts are submitted on time.

Ask for the right amount

Be honest about exactly how much money you need and how you will use it. Asking for too little may mean you struggle to actually implement your growth plans and earn the extra income needed to pay the bank back. However, if you ask for too much, and can’t justify why you need it, the bank is likely to say no.

Don’t give up

If you are turned down for a loan the first time you ask, don’t give up. Ask the bank manager to highlight the weaknesses in your business plan so you can adapt it and make another request.

1. http://www.bankofengland.co.uk/publications/Documents/other/monetary/tre...

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David Prosser
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