I never learned to read. Well, it seems that way. As a long time banker, I tend to get right down to the numbers. Whenever a business owner spends a long period of time polishing their prose in a business plan, I must be honest, I skip it and head straight to the financials.
I can only speak for bankers as bankers are, you see, numbers people. We’re not all that touchy feely. We want to see that a business historically has going on. For SBA loans, future projections matter, but bankers like to live in the past. They want to see how a business or a property has done in the past. They don’t give a lot of weight to what you think the performance will be.
When you are putting together projections, make sure that they are realistic. Make sure you can make a case for the projections that you are making and be sure to include realistic vacancy factors and rents. Many applicants tend to embellish the upside of their investment, which turns off bankers.
When you are preparing a package to present to the bank, simply make sure that you provide them with a complete package. Before you present it, however, move over to the other side of the desk, read your work, and try to poke holes in it. Have a friend or two look at your presentation honestly and ask them to be brutal. List out all of the “objections” that you come up with and rework your presentation to try to have those objections answered. When you get to the point where you can no longer poke any holes in the presentation, you are now ready to present it to the bank. In short, presenting your financing package to a bank can be scary. You will undoubtedly second guess yourself. Just keep in mind that you are your own toughest critic. Simply follow my advice, prepare, and let the chips fall where they may. If it doesn’t work out, make sure it’s not because you didn’t