Improve Your Chances of Getting a Loan

Our Top Ten Tips

Bankers are risk averse at the best of times.  But since the financial scares of the GFC and the European Debt Crisis it is even more difficult than usual to pry open the purse strings of the Australian banks…. especially if you are a small business.

A banker’s main concern will always be protecting their depositors’ capital, so your job is to provide them with as many reasons to feel safe as you can.  Here are our top ten tips for making your banker feel secure.


  • Get to know your banker

The better your banker understands your business and the more he/she knows and trusts you, the easier it will be for him/her to recommend approval of your loan.

It should also be said that a good banker is an important asset.  Shop around and make sure you find someone that you can work with.

  • Have a business plan

Don’t just fill in the loan applications and leave it at that.  Make sure your application is accompanied by a well-considered business plan that demonstrates your understanding of economic conditions and your market and shows your ability to repay the loan.

  • Be clear about why you need the money

Provide a clear and compelling argument for why you need the money.  How will the money be used and what advantages do you expect your business to gain with the loan funds?

  • Ask for the right loan

Make sure that the term of the loan fits the purpose.  In other words don’t ask for a short-term loan to cover a long-term project.  If you are in doubt, talk to your banker before completing a loan application.

  • Ensure a strong and steady cash flow

The bank wants to know that you will be capable of making regular repayments.  Ensure that you can demonstrate a record of strong natural cash flow.

  • Be honest and realistic

Don’t try to snow your banker with unrealistic numbers.  He or she is sure to get ahead of you and your character and management capabilities will be called into question if you are found to have stretched the truth.  If you have a problem, let the bank know immediately and let them work with you.  Banks hate surprises!

  • Clean up your credit

You can bet that the bank is going to look at credit history – your personal history as well as the company.  Make sure you have tidied up any outstanding issues with creditors before talking about a loan.

  • Consider collateral

The bank is going to want collateral, so go with a plan in mind.  If you have sufficient business assets to cover the principal on the loan then you may be able to avoid a lien against your home. 

  • Have a contingency plan

Bankers like to see that you have a contingency plan in place should things go wrong.

  • Get your books reviewed

Errors in your books will only make you look sloppy, calling into question your entire business plan and loan application.  Have your books reviewed by your accountant before you go to the bank.

If you would like help planning for your future capital requirements and/or putting together a loan application please contact us.  We’re here to help you grow. 

Image courtesy of Stuart Miles at

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