Lending requirements

Banks are in business for the same reason as your small business – To make money. Banks make money from fees, deposits held in your account and interest. This amount must cover wages, technology and administrative expenses, bad loans and leave a little for the shareholders.

To ensure the Bank makes money a lender must assess your business. All the information you provide should support the following key criteria:

1) Does the business make sense?

2) Can the company repay the loan?

3) What security is held in the event the company becomes insolvent?

Does your business make sense?

Lenders look at factors such as the type of industry, management experience and capabilities, business operations, competition, and marketing plans. A strong business plan addresses each of these areas.

Can your company repay the loan?

Lenders look at your financial statements to assess the likelihood for repayment. An income statement shows how you made money, a balance sheet shows where the money is stored, and a cash flow projection shows how you will receive and spend money in the future. Additional proof is provided in the other financial documents.

What security is available just in case?

A Bank wants to ensure their loans are repaid even if your company becomes bankrupt. Repayment may come from assets listed on your balance sheet, owner(s)’ personal assets, Government guarantees or real estate

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