August 31, 2010
It is a sad but true fact that almost every bank is overly conservative when they choose who to give bank loans to. Not only are they ultraconservative but they may be intimidating also. They are intimidating for a specific reason and that reason is that either one; if they refused your loan they hope you will just sort of slink away and not bother them anymore and two; if they do give you a loan you will be too intimidated to even try and negotiate better terms.
This is just the way banking goes, and it has been that way for as long as there have been banks. But it doesn’t have to be this way, and in this article I’m going to explain why…
Preparation, when you go to talk to your loan officer armed with just a few figures and facts that are sketchy, even if you think the important figures are safely tucked away in your brain, you are starting out on the wrong foot. On the other hand, if you go in there armed to the teeth with facts and figures, spreadsheets, and numbers; you clearly know what you want and what you need, you’ll start out in a far more positive point of view in the banker’s mind. Bankers like facts and figures and if you walk in with lots of facts and figures you’re already a cut above the normal customer that they see day in and day out.
If you’re trying to get a personal loan be sure to bring in an updated financial statement. If you’re looking for a business loan bring in a financial statement as well as old tax returns for the last two or three years and profit and loss projections for 2 or 3 years into the future as well as a balance sheet. In addition bring a written plan that shows exactly what you’ll be using the money for to the dollar. And especially pay attention to how you expect to pay the money back and the plan for doing that.
These few things alone will set you higher in the eyes of the banker than what they are normally used to working with.
If your banker turns you down, you can always go somewhere else but many times if you’re just persistent with your current banker you can turn things around and actually get the loan even after being denied. Persistence is very important. Just like college acceptance letters and denial letters; you can appeal. In fact that’s what they call it, “on appeal”.
The first thing to do when you’ve been turned down is to talk to your loan officer and ask them for an in-depth explanation. Be persistent and don’t allow them to fluff you off; get the real reason. Then ask them what it would take to get the loan! Often this is all you have to do. Sometimes, and this is true, you will get turned down for a loan simply because your specific loan officer is too busy to deal with you at the moment. There may be absolutely nothing wrong with your loan request, you may be the perfect loan candidate, but if your loan officer is dealing with too many loans at the moment they may just shuffle you away.
If none of these things work however, you can always speak with a supervisor. Or at least make it clear to your loan officer that you’re willing to talk to the supervisor. Bankers don’t like anybody going over their head, it’s just a phenomenon in banking. So you’re banker may very well go to quite high lengths to keep you from talking to a supervisor. The same phenomenon applies equally to all the way up the chain to the CEO.
Of course, in the end, if you try all the tricks and still can’t get the loan, it may be time to just go try another bank. Just because one bank denied you doesn’t mean they all will, in fact, a different bank won’t even know that you’ve applied for a loan already. So you’ve got nothing to lose, give it a try…
Jason has been writing articles online for over thirteen years. When not writing about banking, Jason runs a wildly popular promotional wall calendars web site where he reviews at a glance refills that your office desperately needs!
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