Know From a Pro – Business Loans

What you need to know when applying for a loan

For 50 years, Mabrey Bank’s Muskogee Market President, David White, has been serving the financial needs of the Muskogee community as a leader of the banking industry. With five decades of experience banking local businesses, David is sharing some industry tips on what companies can do to successfully secure a business loan.

Mabrey is a strong financial partner for businesses of all sizes and an appointment with a local loan officer can be set up here. Without further ado, let’s jump in.

1) Why is it important for a business of any size to have a trusted bank and financial partner to rely on for a business loan?

Having a personal relationship with your banker and/or financial advisor is important for various reasons. This connection often allows the banker to know more about your business and your personality, along with your goals and expectations for the financial partnership. A deeper understanding of how your business operates will offer a banker insight to how market conditions may affect the future success of your business.

Particularly in smaller communities, a personal relationship is important to both the banker and the borrower as they each will want to help support local businesses and community efforts.

2) What basic materials should a business come armed with when attempting to secure a loan?

There are a variety of items needed for the client to discuss a project and potential loan with a bank. Financial information such as Tax Returns and Financial Statements will be needed, not only for the business itself, but also the owners of the business as they will normally personally guarantee the loan. Supporting corporate documents which identify legally who the borrower is and who is authorized to act on the business’ behalf will also likely be necessary.

A “pro forma,” or a future forecast based on present performance, could help a bank get a better idea for what a business’ economic goals are and what financial needs will be required moving forward to reach those goals. Especially for startups, this will offer a synopsis for a banker of how your business operates to turn a profit and how you are prepared to handle changes, expected and unexpected, in your market.

3) Are there certain types of loans or repayment plans that you have seen be more successful for a business given their size or history?

A company’s size and/or history will make a difference in how a loan may be structured. There could be a need for seasonal cash flow which would require a Revolving Line of Credit – loans that are normally reviewed and renewed annually. Facilities, including land and buildings, will allow for longer term loans due to the long-term values they provide, while equipment and furniture will have shorter term loans due to the life expectancy of the items. With loans that have extra risk due to collateral value or other reasons, an SBA or other Government Guaranteed Loan may be required.

4) In your experience, are there any tips that could increase a business’ chance of having a loan approved?

Loan approvals are enhanced by the borrower providing ALL needed documentation to the banker. The borrower’s knowledge and understanding of their financial reports and business plan lets the banker know that they have a good handle on their operation. Any good banker will be able to tell if a potential borrower is well-prepared. While that by itself won’t guarantee a loan to be approved, it can go a long way towards establishing a solid foundation for a potential partnership.

5) What sets Mabrey Bank apart as the preferred choice for many commercial and small businesses based in our communities?

Mabrey Bank as an organization is community-minded and employs seasoned lenders that are leaders and servants in their communities. We realize that helping our customers be successful in turn helps the community as a whole grow and prosper.

As our Brand Promise states: “We will always make every effort to deliver the best financial solutions for every individual, family and business so that every Mabrey Bank customer has the best financial opportunity to live a better life.”

If you are interested in securing a business loan through Mabrey Bank, we would love to hear from you. Set up a meeting with a loan officer in your community to talk through how Mabrey can partner with your business.

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