Business Loans: Improving the Odds

In a guest post, David Paulin shares his tips with us about improving the odds with that business loan application. 

Have you recently found banks can take a long time to make a decision and then can easily say no without explaining why?

To avoid feeling frustrated, annoyed, angry or just “what’s wrong with me? I am not a bad person”, here are a few tips to help you get the finance you are looking for and deserve.

  1. Know what you want and why you want it. As simple as it might sound, make it easy for the person looking at your loan application to say “Yes”. They receive many requests every day and only have a finite amount of time to look at your request. If they have questions and need more information they have to stop typing and pick up the phone, which you might not answer, and this costs them time (Remember they have KPIs to meet) .  So above all else, let them know what you want , why you want it and why you think they should say “Yes”.
  2. Get all your supporting information together ahead of time. Following on from 1. above, make sure you provide all the supporting documentation they ask for and do this is one hit. Again make it easy.
  3. Make sure your accounts are up to date. Get your financials up to date. For example, if you are going for a loan in November through to February, the lender would expect you have your last year’s financials signed off. Banks hate dealing with data and information that is out of date.
  4. Are you newly self-employed? The rule of thumb is you have to been self employed for at least two years before you qualify for finance, but there can be the odd exception to this.
  5. Credit Issues? Get any credit issues sorted out. A lot of people find out that they have a credit issue, which can be caused by a dispute over a payment, but more often than not it is through changing address frequently and forgetting to advise everyone as to your new address. It sometimes pays to check your credit rating before you apply for a loan, especially if you think there is likely to be a problem however small.  By doing this, you can either sort out the problem or explain to the lender upfront how the issue came about and what you are doing to resolve it.
  6. Account conduct. Make sure that you have no dishonoured cheques or unauthorised bank charges appearing on your bank statements 3 months before you go for a loan.

Whether it is borrowing money for your business, to buy a commercial or residential property or perhaps undertake a small property development, it pays to take advice so you can:

  • get the loan you are after and;
  • get a fair deal, including the conditions and;
  • pay off the loan before you retire!

David Paulin is an expert in business and personal finance. For more information or to discuss a particular scenario please contact David Paulin on 021-446-101 or email