Persuading potential lenders that you’re the kind of person who’ll be successful in business is vital to securing finance. So what sort of things will they be looking for?
Reassurance about your ability
Whether through a written application, phone call or even a face-to-face meeting, lenders want you to tell them you have the right skills for your current business.
Have a think about what this might include. Do you have general experience running a company? Are you an expert in what your business will do?
If you’re going to speak directly to a lender, make sure you’ve thought through the answers to other obvious questions beforehand, so you can counter any objections.
Written applications or personal pitches should also be able to:
- Demonstrate that you understand your industry
- Have a clear answer on what you intend to do with their money, and why
- Know your business inside and out
- Know your numbers and make sure they add up correctly
- Rehearse and prepare – have your answers down pat
- Make sure your financials are watertight – justify every number
- Emphasise relevant experience – have you worked in this industry before?
- Do you have special skills and/or a brilliant track record?
Reassurance about your business
Be realistic. Your business plan should give you a head start here… but many people still feel over-optimistic about a company that they’ve nurtured from idea to reality. It’s your baby: you want to believe it will succeed.
However, people looking for a return on their investment will not be as sentimental. They’ll be trying to spot reasons not to lend you money (don’t forget loss aversion).
So make sure that your assumptions are – and look – realistic, and that you can justify them.
Luckily enough there’s a popular model designed to help you make sure you’ve got all the bases covered…
The CAMPARI model
Character: are you the right person to do business with? Lenders want to see a capable business leader, with proof that you’ve made money in the past and will keep attracting new customers to make more in the future.
Ability: are you good at what you do? If you don’t have a proven track record, can you show you have expertise in your field? Or that your business includes people who really know what they’re doing?
Means: will you be able to repay? You’ll need a solid business plan showing knowledge of your industry and target markets. And a business model that’s properly monetised, rational and simple to understand.
Purpose: why do you need the money? You’ll need a good business case that spells out how you’ll use this money (saying you’ll increase revenue isn’t enough). For instance, you might need to make a specific purchase or to expand your premises/workforce.
Amount: how did you calculate your figure? You need to spell out exactly how you’ve arrived at your conclusion and how you’ll spend all the money.
Insurance: are you covered? If things don’t go as planned (they don’t always…) you’ll need a plan B to pay off this loan – can you take out insurance or find new income sources? Or do you have tangible assets that could act as security?
What next?
Time to get on with it? Hopefully these pointers will help you put yourself in a potential lender’s shoes. All it really takes is to think about your business (and yourself) from their point of view. That should set you on the right track to writing winning applications and accessing the finance you need for your business.
We’ve eliminated red tape from our own business, and we pass the benefits on to you. You’ll always speak to the same person, who will get to know you and your needs. And, because we’re not burdened by unnecessary paperwork or processes, we’re able to treat you as an intelligent human being. Not just a tick box on a form.
We call it the flipside. It’s why White Oak UK brings money into your business, not bureaucracy.
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