Save Time by Using These 13 Simple Questions to Screen a Prospective Lender

You are concerned enough about your bank to stick a toe in the water and entertain an overture from that pesky lender you met at the chamber of commerce. But you don't want to waste YOUR time if this lender really is not a good fit with your company's needs.

Here are a few initial questions for a prospective new lender:

1. tell me about your commercial loan portfolio
2. who are your typical customers?
3. what type of businesses (service; manufacturer; retail)?
4. what are the annual revenues of the typical borrowers?
5. where do they tend to be located geographically?
6. are most of them entrepreneurial, privately-owned companies, or what type of ownership?
7. describe your ideal situation
8. what types of financing is your bank most comfortable with (lines of credit; term loans; mortgages)?
9. what average borrowing is in your sweet spot?
10. how does your process work?
11. what information do you require?
12. who makes lending decisions?
13. how long does the process take?

Tell the person about your company, but skip the long-winded history, just summarize the past 80 years into a couple of sentences. Use the "elevator speech", your talking points as if this was a new customer. But include some details about ownership (who, ages, roles, etc). Talk about the type of work the business is known for, how you get and retain customers.....talk about long standing accounts.

Okay, what if profits are not good, as one client said, "there's not much E in EBITDA these days." If your financials are not so good, mention "treading water" financials.....at some point, ask the BIG question: how likely is it that you can close this financing if we have treading water financials as opposed to rock solid profits?

Just be sure to guard your time by screening potential lending opportunities!