Source:- http://www.exclusivepp.com.ng/essential-banking-tips-entrepreneurs/

As an entrepreneur, you can make the most of your relationship with your bank.

There are many factors involved in being a successful entrepreneur, but undoubtedly, maintaining good relationships is one of the most essential. While all the relationships that you build as an entrepreneur are important, you should be sure to pay special attention to any that you foster with a financial institution, according to www.bankadviser.com.

Although entrepreneurs typically are used to serving their businesses in a variety of roles, there are some areas where expert help is invaluable. When it comes to fulfilling your business’s financial needs, your financial institution is your best ally.

You can set yourself up for success by taking the time to get to know the people who work at your financial institution and helping them get to know you and your business. That way, when the time comes to seek out a loan, you will already have established a good foundation.

“It was important to our business for our bank to know us,” stated Ryan Stephens, founder of Ryan Stephens Marketing, on BusinessInsider.com. “Developing a face-to-face relationship with your bank can make a difference when it comes to a breezier process for lending and credit, and faster problem-solving if any problems arise.”

You can strengthen your alliance with your financial institution by putting a concerted effort into crafting the image you present and by ensuring that all your communications are well thought out.

Another important tip to keep in mind when embarking on your banking endeavours is to focus on the following: character, capacity/cash flow, capital, conditions and collateral.

“These are basic guidelines that a bank might use to evaluate a potential borrower,” according to NerdWallet Contributor Amolm. “As a business owner, excelling in and/or understanding each of these categories could drastically improve your chances of receiving a loan.”

Character: This is the general impression that a lender has regarding a borrower. It can’t be reduced down to simple numbers; it is more of a subjective concept. If a borrower thinks you have good character, then you are considered to be trustworthy and creditworthy. You can show your good character by being thoughtful and thoroughly prepared for all meetings and interactions with your lender. You can also provide references that can attest to your good character.

Capacity/cash flow: By analysing your capacity and your cash flow, a lender is able to determine your ability to repay the loan. One way you can help your business shine in this regard is to show a detailed accounting of how you will set aside money to pay back the loan, and how you will use the loan funds responsibly.

Capital: This is the sum of money that you have personally invested in the business. In general, financial institutions prefer to lend to entrepreneurs who have demonstrated the ability to invest in their own businesses and, therefore, have equity in the businesses.

Conditions: No matter how great your business is or how well you prepare for your meetings with your financial institution, there may be economic conditions out of your control that affect the decision to give you a loan. This can be for the good or the bad. If you demonstrate that you understand the current economic conditions of your area and market and that you are prepared to excel in that environment, you can help convince the financial institution that you are worth investing in now.

Collateral: As with any loan, a small-business loan is easier to obtain if you have assets that can serve as collateral should you be unable to repay your loan. This is why well-established businesses may have an easier time obtaining a loan, as they typically have acquired more collateral over the years.

The relationship you have with your financial institution is one of the most important relationships that you can foster as an entrepreneur; so keep this information in mind and take action so it grows stronger and stronger.

Source:- http://www.exclusivepp.com.ng/essential-banking-tips-entrepreneurs/

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