Getting financial support from your bank

Approaching a bank if your business needs funding

Few businesses get off the ground without some initial funding. Here are the key things to do when approaching your bank for support.

Create a comprehensive application

A good application will include a lot of detail about your business and the plans you have for it. This can help you in 2 ways: it may enable a swifter decision from the bank, and it can help you to focus on the right things.

Consider including the following to be in the best position and to potentially speed up the decision process

  • Your previous experience (where relevant)
  • The reasons you are seeking financial support
  • How you’ll afford the repayments – including any changes to business that mean you’ll be able to afford them, if you can’t currently
  • A financial forecast for your business – explained further in the next section

Forecast your finances

It’s important to create a clear and comprehensive financial forecast – it will help you to manage your business and set realistic aims. It’s also an encouraging inclusion in the eyes of those who might lend to you.

Calculate expenses first, including

  • Office rental and upkeep – such as utility bills
  • Advertising
  • Staff – including their salaries and equipment
  • Legal fees
  • Insurance
  • Phone and internet

There may also be variable costs, such as the price of the goods you are selling, that you should also take into account.

After that, you’ll be ready to create your revenue forecast. This should be realistic – though don’t be afraid to be optimistic – with sound, substantiated ratios.

As your revenues grow, they should exceed your expenses. It’s important to predict when this might happen, but be realistic – a misjudgement may mean you aren’t asking for enough by way of financing.

Be honest

You should present all of the vital information up front in an open and honest way, including any irregularities or potential problems. If not, they will be discovered later on and may cause a delay in the process – or even stop it altogether.

Integrity of the business and its owner is an important part of a lender’s decision. For example, if you’ve been discharged of bankruptcy in the past, but declare it in your application and provide explanation, the bank may still proceed with caution. If this is discovered later, however, the integrity of your application may be called into question.

You may also be interested in

Business finance options

What’s the best finance option for your business?

We’ve outlined some of the most common sources of financial support so that you can make an informed choice.

Cashflow forecasting

How a good forecast can benefit your business

A cashflow forecast is a useful tool – it can warn you of challenges ahead, help you achieve steady growth and steer you through a downturn.