1.Be thoroughly prepared: Set up a written business plan and think about answers to possible questions. Make use of the wide variety of sources of information and consulting opportunities from your local chamber of commerce or similar institutions.
2.Make an appointment at the right time: It is advisable to contact the bank early on, however, be sure not to take this step too early. Many founders make the mistake to talk to the bank only a short time before launching the venture and are faced with too much time pressure and a resultingly poor preparation of the appointment.
3. Be confident: Appear self-confident and always keep in mind that it is the bank’s job to lend money. Hence, do not behave as a pleader but establish a good level of trust. Show that you know what you are doing and that you will reliably repay the loan.
4. Take an advisor with you: It may be sensible to take a consultant or a founding expert with you to your bank appointment. This expert will be able to guide you in important decisions and give you detailed background information. However, make sure to agree on a strategy and specific content beforehand.
5. Demonstrate Profitability: Show why the planned investments are necessary and explain which level of sales and revenues you are aiming at. Have the relevant numbers to support these arguments at hand.
6. Seek comparable offers: Do not just talk to one bank, but get alternative offers from different credit institutes. You may also mention these alternative offers during bank appointments.
7. Don’t be shy to negotiate: If you do not negotiate the conditions the bank presents to you, you present yourself as a bad businessman. There is always scope for decisions and conditions, so make sure to have the afore mentioned alternative offers at hand.
8. Relevant documents support arguments: Give your discussion partner the secure feeling that your intentions are viable and thoroughly thought-out. It is advisable to have the following documents with you:
- CV
- Work and Study transcripts
- Short version of business plan
- Sales and Cost estimations
- Proof of owner’s capital
- Liquidation Plan
- Profitability Plan
- List of assurances
- Debt Service Cover Calculations
9. Write a protocol: Summarize the main points of the talk in written form and send the document to your business partners for confirmation purposes.
10. If the bank rejects your proposal: This does not mean you should stop working at founding your start-up. Ask for the reasons for the refusal and revise your concept with an experienced founders’ advisor. If the bank mentions lacking securities as the main reason for the dismissal, talk to the guarantee bank of your county about support opportunities.
