What Do Bankers Look For?

Understand what your banker is looking for when you approach him/her with your business plan/budget requesting a business loan.

Management ability

  1. Experience – specific business/industry (as manager/owner)
  2. Resume – classes, training, previous skill usage
  3. Skill of your team – staff & advisors
  4. Action plan to get needed skills that are lacking

Repayment ability

  1. Show that the business can repay the loan
  2. Cash flow & income statements
  3. Where did you get those numbers in the budget?
  4. Schedule loan repayment period to life of the asset
  5. Run financials also with worst case interest rate tests


  1. Show willingness to pay
  2. Credit history (check into you current credit report)
  3. Get any bad news on the table up-front – no surprises later
  4. Bankruptcy & bad credit
  5. Problems with the law – criminal history may delay processing of the loan.
  6. If married or separated, spouse must sign financials. (Community property state)

Debt / Worth

  1. You MUST use some of your own money
  2. How much? Average 20-30% depending on risk & amount
  3. Borrow against your personal assets
  4. Borrow from friends or family
  5. Investors
  6. Seller financing

Collateral – Security for the loan

  1. Assets you may lose if business fails

Contingency – Be prepared to discuss how you will repay this loan in the event the business can not.