Consider these tips before hitting submit


You have bold plans and you want the bank to lend you money to help you realize your business idea.

Obviously, it’s important to go to the bank with a solid business plan, but what does that actually look like?

And what other factors matter in whether you are approved or rejected for a business loan?

Bendigo and Adelaide Bank, head of small business banking Joe Formichella said start-up entrepreneurs should provide a detailed picture of their financial history and business projections.

“Adaptability, innovation and resilience are all key common themes in successful business ideas and businesses,” he said.

“This old adage is true: to be brave without being careful is to be reckless and to be careful without courage is cowardice.

“Make sure you have the right balance.”

Advice for applying for a business loan

Commonwealth Bank’s executive managing director of small business banking, Claire Roberts, said cash flow problems are one of the main reasons small businesses fail in their early years.

“Performing regular forecasts, closely monitoring your cash flow with the right tools, and having emergency savings are a few ways to help you prepare for a cash shortfall and make the most of any surplus,” said she declared.

Ms Roberts said budding entrepreneurs need to figure out what sets them apart and use them to their advantage.

“Really research and understand what your customers want and what makes your competitor’s offering different from others in the market,” she said.

It’s also a good idea to listen to feedback from seasoned business owners.

“While getting constructive feedback may seem confrontational, it will help improve the shape of your business,” Ms. Roberts said.

A good plan

Mr. Formichella said a solid business plan should include what will make the business unique, its history, and the products and services it will produce.

It should also detail the competitive landscape, major customers and suppliers, and describe the corporate structure and ownership of the business.

Prospective business owners must provide financial and bank statements, from which the bank will assess the business owner’s ability to repay a new loan, Formichella said.

“The bank will also request projections over a period of at least 12 months to understand what the future state of the business will look like to ensure that any additional debt can be repaid, beyond existing commitments,” a- he declared.

Common red flags

Formichella said a poorly prepared business plan is among several common red flags that can result in business loan applicants being turned down.

A bad personal or business credit history, erratic cash flow, and a lack of evidence to demonstrate how they intend to repay the loan can also lead to rejection, as well as overdependence on a few customers. or key suppliers.

before jumping

Before you leave your 9-5 to become an entrepreneur, there are a few steps you need to take to get off to a good start.

It is important to get independent financial and legal advice and you should also have an accountant review your business plan.

Be sure to seek advice on the appropriate business structure – whether you are operating as a sole proprietor, partnership, trust or corporation – as each has its advantages and risks.

“[You should have] previous experience and knowledge of the industry in which the company will operate [and] evidence of support or commitment from potential customers,” Formichella said.


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