How to impress the bank manager

Some may have the misconception that bank managers are small-minded Captain Mainwarings who prefer not to lend money. The reality is bank managers want to finance sound business propositions.Richard Holden advises on how to impress

Business owners and bank managers tend to think very differently. Entrepreneurs are traditionally calculated risk takers, whilst bank managers are often conservative. Put yourself in the bank manager’s shoes; think about what they will be looking for when someone approaches them for finance to set up a new franchise opportunity.Banks use a variety of tools to evaluate funding propositions, although bank managers will usually base their lending decisions on the traditional canons of lending. They will look for the following:

• Character
• Capital
• Capability
• Purpose
• Amount
• Repayment
• Terms
• Security 

Approach bank managers who know about franchising
When looking to finance your franchise business it is best to approach a franchise specialist bank. The bank’s franchise departments are the first port of call and the will introduce to a locally-based bank manager who understands franchising. 

Have clear objectives
It is essential that you are clear about what you want to achieve from the meeting. Many businesses fail because they don’t have a clear strategy or objectives. Writing a business plan forces you to address the details of your own business proposal and clarify exactly what you need to do to make it a reality.

Be prepared
Remember, the bank manager will be dealing with many other businesses and will have their own thoughts based upon dealings with their existing customers. While your business finances will be at the centre of your dealings with the bank, the more the bank manager understands about your business, the  more likely he or she will be able to meet  your requirements.

It is important that the bank manager has time to prepare for the meeting as well. Send them a copy of your business plan a few days in advance of the scheduled appointment. The business plan should be punchy – a common mistake is to make it too detailed. The business plan is your document and you must have an excellent understanding of it to confidently present to the bank manager.

Your ‘elevator pitch’
Knowing what to say and how to say it will make you look professional and creditable. Many of the entrepreneurs who present to the ‘Dragons’ on the BBC television programme ‘Dragons Den’ fail to secure the investment because they are not fully prepared and haven’t clearly defined what they want to say. Have a prepared script to briefly introduce your business opportunity and practice the delivery before you meet the bank manager. 

First impressions count
Ensure your choice of clothing is appropriate to your industry. Dress in the way you  would if you were meeting a client. Consider your appearance – ripped jeans and trainers are out!

Expect to be challenged
The bank manager will ask you questions about the operational and financial aspect of your business. They will expect you to be able to answer their questions confidently. By doing so you stand a good chance of securing the backing you are looking for.

Building the relationship
Once you have established a relationship with your bank manager it is important to communicate regularly to keep them informed about developments in your business. Many business owners rely on the services provided by banks, so it can be very important to develop a strong relationship. If you ever experience some form of cash flow difficult, you may  require your bank manager to adopt a flexible approach providing help when  you most need it.

Richard Holden is head of franchising for Lloyds TSB Commercial. For more information email  richard.j.holden@lloydstsb.co.uk

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