photo credit: gutter
If your getting ready to start your own business, or even if you already have an established business but need a loan for various reasons, it is necessary to understand how your bank thinks when going to borrow money. This way if you understand how they think, you will be well prepared for various questions and scenarios.
The New York TimesÂ recently posted an article related to the thinking patterns of banks and what you need to know going in there. When smaller banks are concerned, they while being somewhat affected by the recession are still looking at it as business as usual for them. They are still thriving off of small business loans in their community.
A Lot of your larger banks that are handling large loans in the millions are very cautious these days, they tend to make the borrower jump through many hoops to make sure their loan is needed and will be paid back. Which is actually a good thing them being so choosy, because if they weren’t then we would find ourselves in the same predicament next year.
Bankers say that small-business owners looking for a loan should start by knowing which business measures – debt-to-equity ratio, for example, or net margins – lenders focus on when evaluating loan applications in their industry.