Raising Money

What Do Bankers Want to Know?

John Bradley "JJ" Jackson

25 Oct 2010 • 1 min read

Photo by Raymond Owusu-Afriyie / Unsplash

When a small business or start up approaches a bank for a loan, you need to be able to answer the following eight questions:

How much money do you want?
Why do you want the money?
How will the money be used?
How will you repay the loan?
What is the main source of funds for repayment?
What is the back up source of funds for repayment (such as liquidating equipment or inventory?
How will the loan be secured (collateral)?
Who will guarantee the loan?

Remember the goal is establish a relationship with the bank, so start the dialog in advance of your need. Find out what they are looking for in a client and try to present that story later.

Also, banks prefer to lend you money when you don't need it, so don't wait until you are desperate.