A bank is a company whose main activity is to finance the economy through its public and private companies; like any business, it seeks to minimize its risk-taking and optimize its profitability.
Alongside their own commercial requirements, the so-called “Basel III” agreements oblige financial establishments to respect a certain ratio of equity in relation to loans granted in order to consolidate structures in the event of a new financial crisis.
They generally do not want to risk more money in the project than the creator(s) themselves. In the same way, they prefer to share the risks with as many partners as possible to limit the negative effects.
This partly explains why some business creation projects encounter difficulties in obtaining bank financing. These are generally projects:
Finally, it should be noted that each banking establishment has its own criteria for granting or not granting financial assistance to a new company.
The main points of vigilance that facilitate obtaining a bank loan
As a general rule, it is advisable to balance equity and debt at best (50/50). However, the bank can reduce its equity requirement to a ratio of 30% on average (70% debt for 30% equity) or lower when the loan finances a “limited risk” business creation. following industry standards.
Be that as it may, a lack of capital will be deemed unacceptable by the banker responsible for studying the company’s business plan.
The greater the amount of your contributions, the more likely you will be to obtain your loan.
Whenever possible, ask those close to you for help . There are tax benefits for them at stake!
In addition, there are other financial solutions to supplement your personal contributions . Discover them!
Competition between establishments
It is recommended to compare the different bank offers because the terms ( TEG interest rate , repayment period, guarantee, etc.) may vary from one bank to another. The competition between agencies makes it possible to negotiate better conditions or less restrictive clauses but above all to avoid disappointments when funding is rejected.
Note: loan processing times can vary from a few days to a few weeks depending on the size of the branch and the level of risk of the project.
If your financing needs are significant, why not consider going through a professional financing broker ? For you, it is the assurance of finding one (or more) banks likely to be interested in your project; for the banks, it is the assurance of having in hand a file already examined and presentable (therefore considered solid).
The loan agreement
Indeed, a business plan drawn up for a business creation is always built on the basis of more or less credible hypotheses. It is essential that these, and more particularly those which target the working capital requirement (WCR) , are as realistic as possible based on documents ( quotes , order commitments, etc.). However, the ability of the manager(s) to manage and develop the business is essential.in the choice made by the bank whether or not to lend the amount necessary for start-up.
In order to avoid any stress while waiting for the loan allocation decision, ask what the processing time for your file will be during the first meeting with your banker.
Also keep in mind that the banker will primarily look at your company’s ability to repay its loan and therefore generate good profitability. You will therefore have to convince him of your ability to achieve this by showing the consistency between you and your project .
Diversification of funding sources
As banks increasingly wish to share the risk of financing a business creation project, it is often necessary to find additional resources to finance one’s project . This may be :
obtaining a loan of honor , to supplement its own funds,
the creation of a “banking pool”: several banks finance the same project.
What to do in case of refusal of a bank loan?
The refusal should not be considered as a negative element but as an additional phase of reflection allowing the necessary adjustments to be made. Normally, the refusal of a bank must be justified and argued.
In the event of a refusal, contact a support organization to validate your financial assumptions with them and check the viability of your project.
You should also know that it is always possible to call on Credit Mediation, whose mission is to facilitate access to credit for businesses.