Hey Banker – Can You Lend Me a Dime?Posted by Celeste
Perhaps one of the biggest stumbling blocks for would-be entrepreneurs is approaching financial institutions for lending. It is difficult to know who to approach, what to ask for, and what your chances of success in funding truly are. I recently had the opportunity to sit down with Dave O’Mahony, Small Business Advisor with TD Canada Trust, and talk to him about the inner workings of small business banking.
Dave has been with TD Canada Trust for five years now, and has been involved with over 30 start-up businesses to date. With all of this experience, he is in an excellent position to offer advice to those looking to approach their bank for a small business loan.
To begin with, Dave advises entrepreneurs, depending on the industry they are in and the type of credit needed, to expect the loan application process to take about 2 to 3 months from the first meeting to having the cash in hand. In order to ensure that this process goes smoothly, the entrepreneur needs to communicate openly with their small business banking representative.
A start-up entrepreneur must be prepared to:
- disclose their personal finances
- clearly communicate how their business will operate over the coming years
- project what their cash flow requirements will be on a monthly basis over that time
A business plan complete with financial projections is an invaluable communication tool for this purpose. If the banker can easily extract the necessary data from your business plan and finds your venture to be fiscally sound, you will be on your way to getting the loan or line of credit that you need. If your business planning is incomplete or you have not taken the time to project your cash flow requirements into the future, then it will take significantly more time to adjudicate your application.
Dave O’Mahony can be reached at TD Canada Trust by phone (778) 918 2309 or email dave.o’.
(Disclosure: I deal with Dave in my capacity as treasurer for my community association, and I hold some personal bank accounts with TD Canada Trust. All opinions expressed here are my own and do not represent TD’s views or opinions.)