Credit discussion

credit-discussion

Your counsellor can help you prepare for credit talks. He or she will help you in particular with the compilation of documents. But you as an entrepreneur should also prepare for the credit discussion.

However, many entrepreneurs often neglect this preparation for the actual credit discussion. This is a mistake, because it is often here that the decision for or against a loan is made, or the amount of interest is decided.

When preparing for the credit discussion and during the credit discussion itself, you should pay particular attention to the following eight points.

1. Arrange an appointment with advance notice

You should make an appointment with the bank. And with sufficient lead time to also give the bank time to prepare. Ideally, there should be about five to six days between the call or the personal contact.

PRACTICE ADVICE: Don’t push too hard for an earlier appointment. Because then they quickly give the impression that they particularly need the loan. Moreover, you tend to appear disorganised and haphazard, which leaves a negative impression in advance.

When making an appointment, it is also important to clarify the time and duration of the interview. The duration should also be roughly adhered to and, if necessary, be somewhat shorter in order to still have room to answer possible questions at the end.

PRACTICE ADVICE:  Even if the duration of the bank meeting is fixed, you should plan more time and, if possible, not make any other appointments on that day. If the loan meeting takes longer than expected, you will be unnecessarily pressed for time and may have to cancel with other business partners, which in turn will leave a bad impression.

2. Dress appropriately and appear correctly

Banks still act conservatively. Men usually work in classic dark suits, women in corresponding trouser suits. They should at least roughly adapt and not dress too “casually”. For example, men can also wear a combination without a tie.

PRACTICE ADVICE: Attention: If you do not look authentic in a costume or suit and feel that you are “dressed up”, it is better to go for more upmarket casual clothes.

Correct behaviour also includes greeting and addressing the bank staff by name, a firm handshake, regular eye contact and, when saying goodbye, also a handshake and “nice” parting words (if necessary, practise this beforehand and, if necessary, adapt it to the “Corona rules”). Experience shows that a good and correct appearance contributes significantly to obtaining a loan at good conditions.

3. Keep the presentation concise and precise

You will almost always be asked to introduce yourself briefly with your CV at the beginning of the interview. The emphasis here is clearly on “briefly”. If you spend too long describing what you have already achieved and your past successes, you run the risk of failing to convey the necessary sense of optimism and instead continuing to wallow in the past. The bank would rather hear how you envision the future and how and with what you would like to ensure further success.

4. Present projects actively and with concrete examples

The actual presentation should be active and definitely emotional. After all, you are pursuing the goal of making your company fit for the future with the loan. You can therefore let the bank employee feel a certain enthusiasm.

You have to make the presentation yourself. You also have to be familiar with all the content and be able to answer all the bank’s questions yourself.

PRACTICE ADVICE: It is not the counsellor’s job to present and answer the questions in the interview. It even makes a bad impression if he has to step in repeatedly.

If, contrary to expectations, a question cannot be answered, you should admit this and not search for possible (usually insufficient) explanations. Instead, you should record the question and provide the answer promptly after the presentation.

In addition, you should continuously work with concrete examples and explanations in the presentation. The “motto” from you must be: “The bank employee is unfamiliar with the subject and it is my job to convince him with simple and comprehensible statements.” And that often works best with examples.

PRACTICE ADVICE: They should show that they are engaged and interested and should feel free to take notes if the bank has any questions or comments. This will ensure that nothing is forgotten. And you will have the opportunity to pick up on selected points again later in the presentation.

You can also use the notes to jot down key points for your own documentation. This also provides you with the opportunity to respond to the bank in a well-founded manner in the event of any points of dispute or misunderstandings.

5. Be prepared for technical problems

In any case, you should also prepare for technical problems if you give the presentation with a notebook and beamer, for example. If suddenly the beamer goes out or the computer fails, you should not spend a long time explaining or looking for alternatives. And you should not stutter and thus appear less confident. The bank employee usually has other appointments and no time for lengthy troubleshooting.

PRACTICE ADVICE: But even then, if the bank employee still has time: What happens if the technology stops working at all? For such cases, you should have three to five bound paper copies of the presentation with you and continue to work with these documents in case of technical problems. An additional copy of the presentation on a USB stick ensures that the bank still receives the documents electronically.

6. Know and respect your competitors

In order to advance your company, you naturally also have to deal with the competition. Of course, from your own point of view you have the better products and are more successful on the market than your competitors. However, you should not badmouth them or even “pull the wool over their eyes”. On the one hand, this shows a lack of fairness and sovereignty. On the other hand, it is possible that the bank does business with precisely these competitors. Polemics or bad language are therefore counterproductive.

You can score points, on the other hand, if you show that you know the fiercest competitors, have dealt with them and are able to show how and with which products and services you would like to positively differentiate yourself.

7. Appear self-confident

Even if you need a loan, you must not act as a supplicant. After all, you don’t want a handout from the bank. Rather, you have a product or business idea that needs to be financed and that should yield income. And the bank receives part of it as interest for granting the loan. So you must never forget during the conversation that you are offering the bank concrete services in return and thus both sides benefit.

PRACTICE ADVICE: However, you should be strictly careful not to give the impression of being arrogant and overbearing. If there are questions or comments, you should listen and let the bank employee finish.

  • What still needs to be done?
  • Who is in charge (the borrower or the bank)?
  • Who is the contact person for the activities?
  • What is the timetable and what deadlines (among other things, until when is an offer from the bank valid?) must be observed?
  • By when should – or must – the loan be disbursed at the latest in order not to jeopardise the project?

If you do not conclude a concrete agreement with the bank at the end of the discussion, you run the risk of not getting a loan. Or you will be forced to contact the loan officer afterwards and then more or less inconveniently take care of any outstanding points one by one.

PRACTICE ADVICE: If you are unsure about presentation and appearance, you should practise the interview in advance, if necessary, together with your advisor. This is not only about appearance, but also about keeping to the given time frame and reacting correctly and calmly to possible critical questions.
You can also practise how to deal with disruptions, e.g. the technical problems already mentioned or interruptions from third parties. The checklist below summarises the most important points again.

All information and details in our articles and information have been compiled to the best of our knowledge. However, they are provided without liability. This information cannot replace individual advice in specific cases.


Link to the german version: https://thevisionworks.de/kreditgespraeche

Project Information

Project reference number: 2020-1-ES01-KA226-HE-095810
Project acronym: FINANCEn_LAB
Project full title: Digital Simulator for Entrepreneurial Finance
Starting date: 2021-03-01
Duration: 24 months

This project has received funding from Erasmus+, Call 2020 Round 1 KA2 - Cooperation for innovation and the exchange of good practices, KA226 - Partnerships for Digital Education Readiness.

National Agency of the Applicant Organisation: ES01 Servicio Español para la Internacionalización de la Educación (SEPIE)

With the financial support of:
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