For a bank, your education and professional experience are paramount. She will be more willing to lend to a professional who already has some professional experience than to a novice. Creating and running a business is not easy! According to the statistics, only one in two companies managed to pass the 5 year mark! The bank expects to be repaid in a relatively short time, and will grant approval for a business credit application that appears to be solid.
Although each bank has its own requirements, in general, the amount of your personal contribution should be 25 to 30% of the total amount. You should know that the bank will assess the situation of your personal wealth and will pay attention to your personal margin of maneuver, after payment of your contribution. Indeed, the banker will appreciate even more if you present an ambitious project and you invest yourself to the maximum. On the other hand, it disapproves of an investment policy that consists in completely losing one’s self. It’s up to you to find the “happy medium”.
Financial institutions prefer to finance projects with a high rate of return. In this case, refrain from applying for professional credits for innovation or research! To prove the profitability of your project, you must draw up a forecast balance sheet that is spread over 3 years and based on realistic forecasts. When studying your loan, the bank will particularly focus on this document. The latter must make it possible to visualize the payment of the deadlines, but also to present an amount which will constitute a “margin of safety” for the future development of the company.
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