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It’s Not What You Say . . .

We have all heard this phrase: It’s not what you say, but how you say it. Would it surprise you to know that this is especially true when applying for business financing?

The sobering statistic is that nearly three out of four Small Business loans are turned down by Big Banks and about half are turned down by smaller Community Banks. Most of us feel this decline rate is way too high and believe it can be improved. Prior to going out on my own as a consultant, I spent 20 years lending money in the banking world. While working in large institutions and small community banks, I discovered that every bank had their own unique preferences on the deals they liked and did not like. These days I am a big advocate on helping businesses tell their stories to get them noticed, so here are three suggestions to ease the financing process for business owners.

1. Presenting Your Package, the Way a Banker Needs to Hear it

One of the weaknesses I have seen consistently is how borrowers present their financing packages. This is not always the business owner’s fault. They are busy running their businesses and many lenders unfortunately do a poor job of helping borrowers understand what they are looking for. In addition to financing getting turned down, we also consider that the total process takes longer than it should. Some borrowers would receive more favorable terms if the lender really understood the depth of their business.

One of the things I cover in my book and discuss in the podcast with Tom is exactly what banks look for when considering a financing package. There are 5 key elements that are judged regardless of loan size or lender. We believe that if you address all these areas with your financing presentation, you will improve your chances of getting approved, or at a minimum, speed up the turnaround time of receiving an answer.

2. Telling Your Story to The Right Type of Bank

Once you have your loan packet dialed in and ready to go, the next thing we must contemplate is to whom you are telling your story. No matter how great your loan package is or the strength of your company, if you are talking to a lending source that does not like the type of loan you are asking for, you are wasting your time. Which is why taking it to the right bank is important.

Some banks do not like to lend to certain industries. For example, if you are in the restaurant, hospitality, or Oil and Gas business, it would be a good idea to ask your loan officer directly about their financing policy for your industry. Your industry/project type is considered either Highly Desirable, Less Desirable or Undesirable. If its highly desirable, then the lender does business in your industry on a regular basis. If it less desirable, they will most likely do these loans on a case-by-case basis and it is usually an exception to their regular bank policy. If you fall in the groups or industries that are completely undesirable to the lender, know that regardless of the strength of your file, you are not going to get anywhere with them. This lender unfortunately does not like your industry type, so you can move on to those that do.

3. Your Presentation Must Make a Good First Impression

Now that you have dialed in to the right type of lender, you must communicate clearly to the RIGHT PERSON in the credit process. When I give presentations, I often poll the audience regarding who they think the most important person is in the lending process. The usual suspects range from The Loan Officer, the Market Executive/Bank President (on larger deals), The Chief Credit Officer/Loan Committee who usually makes the final decision or is it the credit analyst/underwriter putting the packet together for the internal approval process. That first impression will make a big difference. Who it really is may surprise most people.

So to recap- what, how, where, and to whom you tell your story makes all the difference in making the financing process smoother. Your business is worth it.

To learn more about this and other secrets to improving your chances of finding financing for your business at the best terms possible, listen to the podcast.


Bill King is a Commercial Loan Consultant/Broker and owner at 4 Kings Capital. Having spent 20 years in banking, he has helped small to mid-sized businesses find financing for their needs. This experience gives Bill a unique insight into the credit process. He is skilled in matching borrowers with the right financing sources. Check out his book No Bullshit Business Finance Guide on Amazon.


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