To obtain a professional bank loan , many criteria come into play to convince a financial partner. Beyond the traditional conditions (percentage of contributions, profitability of the project, not being banned from banking), there are several other elements that can impact, positively or negatively, your chances of obtaining your financing .
Le Coin des Entrepreneurs presents 10 criteria that will influence your chances of obtaining your professional bank loan and gives you several tips to increase your chances of success:
1. The match between your means and the overall financing of your project
The adequacy between your personal financial means and the overall amount of financing for your project is one of the main criteria studied by banking partners. You must have a sufficient personal contribution . Otherwise, no bank will agree to finance you. Here are some benchmarks at this level:
On a business creation , it is ideally necessary to be able to personally finance at least 25% of the project.
On a business takeover, it is ideally necessary to be able to personally finance at least 20% of the project.
In the absence of sufficient contributions, you have solutions:
First of all, you can check whether there are any solutions that would allow you to increase them: an honor loan, a grant, participatory financing, etc. The new resources mobilized will reduce the necessary bank financing accordingly.
Then, some organizations have the mission to help entrepreneurs with low resources to finance their project. This is for example the case of ADIE, which offers micro-credits (up to 10,000 euros) to entrepreneurs who have difficulty accessing bank financing.
2. The profitability and financial balance of your project
For your project to be financed, you must be able to justify its profitability and its financial balance . It is your forecast that allows banking partners to be sure. At this level, they will be able to consult:
your income statement, which highlights your result. Preferably, it should be positive. A deficit can be explained at the start of the activity, in particular in the presence of large initial investments, a late start of the activity or a break-even point that cannot be reached in the short term;
your cash budget , the balance of which must be positive. Failing this means that your company is hypothetically in an overdraft situation, which could potentially lead to a bankruptcy filing;
and your financing plan , which makes it possible to validate the balance between the resources mobilized within the framework of the project and the needs to be financed.
3. The absence of registration at the Banque de France
Filing on the payment incident file: if you are registered on one of the 3 payment incident files of the Banque de France, you have no chance of obtaining bank financing .
This criterion is a blocking point in the context of your funding request. It is necessary to request beforehand the lifting of your registration on the file. To do this, you must have regularized your situation with the establishment that requested your registration.
4. Your level of training and skills
Your level of training and skills must be adequate for the needs of your project. Indeed, if you do not have the necessary skills to implement your project , no banking partner will agree to follow you. This assumes, beforehand, that you have identified the skills required for your project, then that you have made the connection with yours (and possibly those of the other members of your project team ).
Finally, if your job is regulated, you will obviously need to hold all the necessary qualifications or diplomas. If in doubt, you can ask the professional organizations in your sector of activity.
5. Experience in the sector of activity of the project
Your level of experience in the sector of activity is an element taken into account by the financial partners that you will solicit. Even if the qualifications and the diplomas to exercise your future activity are important, the experience stored in your previous jobs is also.
Several years of experience can in particular justify the mastery of your technical know-how, it is a major condition for success. In addition to the qualifications, you have applied your knowledge in a real-life situation, such as providing a service or offering a product to customers. In addition, thanks to your experience, you will be better prepared to manage delicate situations and find solutions.
With respect to banking partners, the more experienced you are, the better. The more competent you are in the trade you practice, the more you can maximize the satisfaction of your customers. On the contrary, if you lack skills, your customers will quickly notice it, which will be detrimental to your notoriety.
6. The support of your family and loved ones in the project
The support of your family in the project is another important criterion for banking partners. Indeed, family support increases the chances of success . Otherwise, it increases the risk of failure.
Family and loved ones will provide you with very important help if you are going through a delicate period. They will prevent you from sinking into a negative spiral, and will encourage you to bounce back. An entrepreneur needs those around him to draw energy from.
7. Sound management of your personal accounts
The management of your personal accounts is scrutinized by the banking partners involved. As part of your financing application , you will be asked to provide your latest bank statements (usually the last three). This will be to check that you have no bad debts, overdrafts or overspending tendencies.
Often a person’s behavior is similar in both areas. If personal management is sound, it will also be sound at the professional level . If this is not the case, there is a strong risk that this behavior will reproduce itself on the company. Sound management of personal accounts is a positive signal for banking partners.
8. Your level of personal debt
Your level of personal indebtedness is scrutinized by the banking partners to analyze your request for financing. At this level, the principle is rather logical: the less debt you have, the better!
A person in debt on a personal basis must respect his commitment to repay the installments. This implies having, in return, regular income of a certain level. When the entrepreneur is personally indebted and also wishes to incur professional debt, the level of risk logically increases for the bank. Of course, the risk assessment at this level is strongly correlated to the amount of income.
9. Your savings and other income
Your personal savings and other income have an impact on your application for a business bank loan. These elements determine your level of dependence on the income from your future business , and condition your financial precariousness. Being able to last several months without having to pay a salary through the new company is a positive point.
10. The partners who accompany you
Finally, the partners you have gathered around your project also work in your favour. Being well supported is positive for banking partners. Moreover, banks regularly require that the business plan has been reviewed by a chartered accountant. We are not going to argue about the merits of this requirement, but it is a fact that must be taken into account. An entrepreneur must know how to surround himself with competent people.