In today’s economic climate, one of the best ways a business owner or aspiring entrepreneur can succeed is to establish a relationship with the right bank. Your bank should be more than just a place to deposit your finances; it should simplify your business and management operations. Additionally, your financial institution should serve as a resource, providing valuable information and guidance on business matters.

In the banking business, as with almost any facet of business or life, relationships are one of the most important factors. It’s a fact that you feel great about helping someone that you know. Your bank wants to see you succeed because your success directly impacts the bank’s success. If your business is successful, the bank profits. Similarly, the bank’s actions directly impact your business operations. A poorly structured loan may have a considerably negative impact on the cash flow of your business, but a properly-structured loan could greatly enhance your cash flow position and profitability.

When lending money, most banks will require certain pertinent financial information in order to approve your deal:

• FICO Score: Calculated with a formula that lenders use to predict how much of a risk you are as a borrower, and one of the most important factors used when determining whether or not to lend money and at what rate.
• Balance Sheet
• Income Statements (or tax returns)
• Cash Flow Statements
• For established businesses: 3-5 years of financial info. and 1 year projection
• New businesses: Current financial statement and 1 year projection
• Business and Marketing Plan

When you don’t have credit history, it can often be extremely difficult to obtain a credit card or other type of loan. This is another reason why it is so important to have a strong working relationship with a bank. Bank Account history can be a vital component for consideration if credit history is unavailable. When you have active bank accounts in good standing, you prove that you can manage money. Establishing credibility with a bank will improve the chances of obtaining a loan or line of credit. The bank you do business with should know you and value your business, and therefore be willing to help you.

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For more information, contact Diamond Bank’s Commercial Loan Department at 847.427.7800