By: Alex Monnier, Sr. Commercial Lender

Whether you’re looking to expand your business, purchase equipment, buy a property or take advantage of a new opportunity, financing can play an important role in helping your business move forward.

As a commercial lender, one of the questions I often hear from business owners is, “What do you look for when considering a business loan?”

The answer isn’t just one number. We want to understand your business, what you’re trying to accomplish and how financing fits into those plans. Here are some of the things a commercial lender may consider when discussing a loan with you.

Your Business and Your Goals

Every business is different, which is why one of the first things I want to understand is your story.

What does your business do? Where is it today? Where do you want it to go? Most importantly, what are you hoping to accomplish with the financing?

Maybe you need a new piece of equipment to keep up with demand. Maybe you’ve outgrown your current space or have an opportunity to purchase another business. Understanding the “why” behind the loan helps us see the bigger picture and determine financing options that make sense for your goals.

Your Cash Flow

Cash flow is an important part of the conversation because it helps provide a picture of the financial health of your business and its ability to take on additional debt.

A lender will typically review your business’s financial information to better understand its income, expenses and existing obligations. Depending on the loan and your situation, we may also discuss projections and how the investment you’re considering could impact the business moving forward.

Don’t feel like you need to have every number figured out before you talk with us. Starting the conversation early gives us an opportunity to understand where you are and what information may be helpful as you move forward.

Your Credit History

Credit is another piece of the overall picture. Depending on the business and type of financing, a lender may look at the credit history of the business as well as the individuals behind it.

Rather than focusing on one number alone, we’re looking to get a better understanding of your overall financial situation. If you have questions or concerns about your credit, bring them up. Having an open conversation can help us better understand your circumstances.

Collateral

Depending on the type of loan, collateral may also be part of the discussion. This could include real estate, equipment, inventory or other business assets.

The type and amount of collateral needed can vary based on the financing, which is another reason it’s helpful to talk with your lender before making assumptions about what you may or may not qualify for.

The Relationship Matters

To me, commercial lending is about much more than approving a loan. It’s about getting to know the business owners I work with and understanding what they’re trying to accomplish.

You don’t have to wait until you need financing to start that relationship. In fact, getting to know your lender before a major purchase or opportunity comes along can make those conversations easier when the time does come.

If you’re thinking about growing your business, purchasing equipment, investing in property or simply want to know what financing options may be available, start with a conversation. You don’t have to have everything figured out before you walk through the door.

Ready to get the conversation started? Get in touch with a Minster Bank lender today.