This is how you make a perfect loan application – according to the bank

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Published: November 27, 2022, 9:37 p.mFredrik Josefsson is Head of Entrepreneurs & High Growth at SEB. In tough times, companies often need extra financing – at the same time, it can be more difficult to get loans. But you can improve your chances of getting the financing your business needs. Here, Fredrik Josefsson from SEB gives his four tips for how to prepare your loan application and your meeting with the bank.Read more about how you can secure financing for your export businessFredrik Josefsson is Head of Entrepreneurs & High Growth at SEB. As the initiator of SEB’s growth hub Greenhouse, he has seen 5,000 Swedish companies grow and he therefore knows the role external financing plays in companies’ development. But how do you as an entrepreneur secure the all-important financing from the bank? Fredrik Josefsson says that the single most important factor for whether a loan is granted – regardless of the market climate – is the ability to repay. – That we see that the loan can be repaid is what makes the decision. This applies regardless of the general market situation, but in troubled times like these it is even more important. To demonstrate good repayment ability, it is important to carefully prepare your loan application and the meeting with the bank. Here are Fredrik Josefsson’s four tips for how to get the bank to say yes.

1. Calculate, reason and forecast

Showing strong finances is important in the meeting with the bank. It includes being able to reason about questions such as how stable your industry or business is in troubled times, how secure the company’s customer base is and how customers’ buying behavior can be affected by rising prices. Show this in different forecasts. – Cash flows, balance sheet, order intake, growth – there are a number of forecasts that the bank wants to see when we look at a loan application. If you want to impress us, my tip is to take advantage of various developments. Show both a conservative and a realistic forecast, says Fredrik Josefsson.

2. Show on cost control

According to Fredrik Josefsson, it is important to communicate that the company understands the current market situation. Right now it is synonymous with demonstrating good cost control. – We would like to see that there is flexibility and that you have the opportunity to quickly scale down if necessary. Here, too, it is good to present different scenarios. For example, what happens to your margins if a supplier raises its prices and what alternative solutions do you have then? If you can, for example, outsource certain services if necessary and thus lower your fixed costs, it is good to take off.

3. Reduce the need for financing and the bank’s risk

Through various methods, companies can reduce both their financing needs and the risk that the bank takes on when it lends money to the company. Both measures make it easier to get financing. To reduce your financing needs, you can, for example, try to lower your costs or increase the use of advance payments within the business. To reduce the bank’s risk, you can bring in an actor such as the Export Credit Board, EKN, in a deal that has a connection to exports. – Because EKN can share the risk with us at the bank, their participation makes it easier for us to say yes. Furthermore, a collaboration with EKN is yet another sign that the company really thinks about and is in control of the situation, says Fredrik Josefsson.

4. Let the business advisor be an advisor

Not all companies see the bank’s business advisor as an actual advisor, and that can be a mistake in itself. The bank’s advice means an in-depth contact that gives the company valuable insights about the bank and vice versa. – We encourage dialogue, especially now. The dialogue is important for us to understand all the soft values ​​that exist in the company and it can really make a difference. In our advice, we can also deal with things that we ourselves know are important for the bank when it comes to financing, says Fredrik Josefsson.Read more about how EKN’s guarantees can help the bank finance new export venturesThe article is produced by Brand Studio in collaboration with EKN and not an article by Dagens industri

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