How do I convince my bank manager to lend me money?

Money is a very delicate issue, and as we all know, banks really don’t like to lend it out. There are numerous procedures and requirements, not to mention the forms that you must fill in order to get any money at all. There are, however, methods that can help you get more money and in some cases even at lower interest rates. These methods aren’t written in stone and will not guarantee you the loan, but it will help in convincing your bank manager to lend you the money.

The first thing that needs to be covered is you! The majority of all deal breakers originates from the person pitching the deal. The same goes for loans; the bank manager will judge you within the first five minutes of meeting him and will either be 95% in favour or against giving you the loan. It is vitally important, therefore, that you be very well presented and to not seem needy. Most people ask for bank loans because they want to kick start a project or purchase a house of some sort. If you look like you need the money, then the likelihood of the bank manager granting you the amount you are requesting will be drastically reduced. On the other hand confidence in your character and personality will increase the confidence the bank manager has in you. There is something called “rapport” which basically means how much a person likes you. People like people who are like them, and thus it is vitally important to look like a person that the bank manager would befriend. If you can gain that level of confidence then you are in the money. A slight tip would be to mimic the bank manager’s mannerisms and even posture, yet this needs to be done on a subliminal level so that the bank manager does not feel like he is being mocked.

The second element that you need to cover with regards to bank loans is to have covered every single detail. The more you know of your project, the more confident you will seem. This due diligence will allow the bank manager to trust you more easily, and if you seem like a trustworthy person, then a larger amount of money could be granted to you. This diligence does not just pertain to the project or the loan, you must also investigate the bank manager. Obviously this does not mean that you will follow him around in your car weeks prior to requesting the loan, but rather undertaking a more superficial background check on the individual. What are good points to take into consideration? His religion, his values, sports, family etc.If you know what the person believes in, you can adapt your “verbal packaging” or the type of wording you will use in your interview, and thus create more rapport.  In essence rapport is the most important factor when it comes to asking for anything. To understand rapport a bit more clearly, simply ask yourself a vital question, “would I give my car keys to a stranger on the road?” or “would I trust the care of my children to a person I’ve just met?” The same goes with the bank manager; if you can convince him that you are a trustworthy individual, with values and discipline, the more likelihood there is of him giving you a fat sum of money.

As previously mentioned, always be prepared with the detail of your presentation, but also take into consideration how many people ask their bank managers for money. Ensure that your presentation focuses on the most important details that you think you need to convince your bank manager. Secondly take into consideration that your bank manager is a very busy individual, and that the later you have your appointment with him the more people he has already seen. Always try to get your interview as early in the morning as possible – his mind will be fresher and he is yet to be bothered by random elements during the day – the more control you have over the situation. Thus the early bird actually does catch the worm.

The most important factor in getting more money or any money at all from your bank manager all lies on rapport. If you could manage to be referred by someone of importance your rapport grows. Many people are receiving large sums of money merely on referral alone, thus making good contacts can help you tremendously in this area. A final tip before asking your bank manager for money; rehearse the meeting in your mind one day before. Visualize your posture and the response of the bank manager.Many Olympic gymnasts do these pre-visualization techniques before major competitions and benefit greatly. These are just some tips on the subject, but will also benefit you in many other areas of your life.

Example of document that you need to prepare for your meeting with the bank manager

Customer/project details and data for credit analysis

1. Full name of legal entity

 

2. Legal Full Address, Tel, fax, www

 

3. Company registration and VAT number

 

4. Date of company establishment

 

5. Contact details:

 

-          name, function, tel, fax, e-mail

6. Company Information:

 

-          Business overview – details of the customer, their market position and customer

-          What is the competitive advantage of the company?  What are their weak points?

-          Who is the management team? Any information relevant on this topic, succession plan?

-          Digital printing, what is the experience of the company in this market? Is this the first machine of this type? If so, training? Ramp up period? New customers will take time to attract. Is there a contract in place?

-          Insight into customer cash flow projections and 3 year business plan

-          Insight into the split between the customer’s core business and their growth prospects and details of any new markets and customers, % share or mix of this business going forward.

-          What remedy plans do they have in place to grow? To address their liquidity / cash?

-          Details of their bank facilities and debt facilities, what are the terms, who are the providers/lenders? How much headroom do they have? What cash requirements do they have going forward?

-          An understanding of what applications and jobs will be printed on the new equipment?

-          Are the existing customer jobs contracted print jobs? (i.e. are they secured by a contract?)

-          What level of collateral / or deposit can the customer make available for the new investment?

7. Break-even analysis for the equipment

 

8. Financial information:

 

PLEASE ATTACH TO THIS TEMPLATE THE FOLLOWING DOCUMENTS:

-          Annual Audited Report (Balance Sheet, Income statement, Cash Flow) for last 2 years – English, German or French version, Electronic format

-          Interim results for the current year

Author – Lucien Moons

International Business development Consultant

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