Bank interview: Assistance with loan negotiations

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What is the purpose of bank meetings in financing?

Explanation of terms: When entrepreneurs need credit, negotiate with bank advisors. These negotiations are known as bank talks. The singular term – the bank interview – is usually used in connection with the start of loan negotiations, i.e. the first interview. And here in particular when company founders come into contact with donors for the first time.

How does the bank interview work?

The bank interview in the sense of an initial contact for start-up financing is comparable to a job interview. The bank advisor is being wooed as a possible donor. The role of the advisor is reversed from the salesman’s position to the practical customer role and the bank customer, the potential beneficiary, takes on the role of the applicant. And especially in German-speaking countries and their conservative approach to formalities donors expect a correspondingly serious demeanor. More important than the clothes and the formal demeanor of the “loan applicant”, however, is the business concept and its presentation.

Since the recent financial crises and the stricter capital requirements for credit institutions (keyword Basel III), the banks have only granted their loans in an extremely restrictive manner. This makes a convincing idea and presentation of the business concept all the more important. Therefore, the bank interview requires extensive preparation.

The first step is to find out which documents the bank has already written in advance wishes to have submitted. These should be submitted in the form of a clean and clear folder, but as a minimum as a well-developed Power Point file. All other documents should go to Presentation at the bank meeting well prepared being.

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What do the advisors want before and during the bank meeting?

For example:

  • A fully developed business plan
  • A financing plan – often until the planned break-even point or ROI is reached
  • A comprehensive résumé with references
  • A list of all securities and liabilities

An important part of the business plan is the business concept and especially the unique selling point. If a franchisee business is to be set up, the franchisor will contribute these components to the business plan. When creating the financing plan, the franchisors often contribute important auxiliary and empirical values.

If the credit institution is the beneficiary’s house bank, the company founder can also apply for funding from the advisor.

How do you prepare for the bank interview?

Business owners should look adjust to critical questions. It is helpful to have answers and objections ready. It is also not to be assumed that the donors know every point of the financing or business plan inside and out when they first talk to the bank. The bank advisors often ask, for example, about the reasons for the expected sales and earnings figures, the organization of sales or the planned marketing measures. Often the comments culminate in the question: “How would you like to win your first customer”? The borrower should also be prepared for inquiries about insurance protection, receivables management or the choice of location.

Going to a bank meeting alone or with a franchise advisor?

Franchise consultants are indispensable companions when planning and setting up a franchise company. They also support founders in bank meetings – with their experience and expertise in legal and financial matters. In the case of bank advisors, the participation of a franchise advisor seldom ensures that they retain a negative, incompetent or helpless impression of the franchisee as a person in need of help. Rather, the bank advisors see the participation of the experienced professional as evidence that the potential borrower is pursuing his / her founding intentions all the more seriously and professionally.

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Videos on the topic of bank discussions:

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Source: https://www.franchiseportal.de/definition/bankgespraech-a-4918

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