The search for a loan is a critical tactic in your business plan. There is a right way to secure business financing that will preserve your lending relationships, maximize your borrowing effectiveness and promote business growth. Be a more durable borrower by following these seven principles for finding loans.
- Treat your lenders like life partners: Creating a close professional relationship may help you get better loan terms and pricing and may facilitate the credit approval process.
- Design a compelling request for proposal (RFP): Invest time and money to produce a professional loan request that will represent you in front of the credit committee.
- Get more than one loan bid: Competition establishes markets.
- Maintain a current loan quote matrix: A spreadsheet will help you monitor the loan bid process and quickly compare quotes to select a winner.
- Be discreet: Be a good borrowing partner and avoid shopping quotes to competing lenders.
- Best and final or sharpen your pencil? Let all competing lenders know the ground rules for bidding.
- Pick a winner quickly: Bids can go stale due to changes in credit market conditions or within a particular lender.
Finding new debt can be a rewarding experience. Your actions during the bid process will make all the difference in the current loan closing and future debt from your stable of lenders.