MONEY

New BusinessMONEY

  • Back to quick summary
  • Your Business Loan: What Banks Need
    Game Plan
    In-Depth

    Be Transparent

    Experienced lenders have processed hundreds of business loan applications and have met hundreds of potential borrowers, so they have plenty of expertise in determining whether an applicant is trying to downplay or hide something. Bankers have plenty of resources to find a lot of information about your personal and financial history. And if there’s one thing bankers don’t like to see is any inconsistencies between how you present yourself and what they learn about you online and through background checks.

    That means honesty is the best policy. Don’t stretch the truth on your application or during any loan interviews. If there’s something negative in your past that concerns you, be upfront about it. And if you don’t know the answer to a question, admit it rather than try to pretend you don’t know.

    As Senior Vice President of US Bank Ted Biggs pointed out in an interview with Fox Business, every business has faced tough times and “you can never be shy about what’s going on.”

    Also avoid making statements you can’t support with actual data. While your loan will be evaluated on its merits, if bankers get a sense that you’re constantly trying hide negative facts or ignorance about your business, your chances of getting funded will be severely limited. 

    Game PlanGame Plan

    Game Plan

    • Consider running a background check on yourself to see what information bankers can access about you. Also run a deep search on yourself and your business through Google and social media sites. And if you have ever been arrested, check with the appropriate court to make sure any potential charges have been dismissed or discharged.
    • If you’ve started any other businesses and they’ve failed, be open and upfront about it and provide information that explains the situation.
    • As noted in the “Know Your Credit History” above, make sure you know what your credit report looks like so you can take steps to correct any inaccuracies and prepare an explanation of any accurate information that may appear to be negative.