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How Much Money Do U Need

The document provides guidance on common questions that may be asked during a business loan interview and how to best answer them: 1) When asked how much money is needed, present a carefully thought out response focused on your business needs, not wants. 2) When asked how funds will be used, provide specifics on how the money will be invested in the business to increase revenues and ensure repayment. 3) Be prepared to explain your credit profile and any derogatory marks to address any creditworthiness concerns. 4) Have your business plan details ready to discuss the business's financial strengths and profitability to demonstrate repayment ability. 5) Explain how loan repayments will be made through business

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94 views2 pages

How Much Money Do U Need

The document provides guidance on common questions that may be asked during a business loan interview and how to best answer them: 1) When asked how much money is needed, present a carefully thought out response focused on your business needs, not wants. 2) When asked how funds will be used, provide specifics on how the money will be invested in the business to increase revenues and ensure repayment. 3) Be prepared to explain your credit profile and any derogatory marks to address any creditworthiness concerns. 4) Have your business plan details ready to discuss the business's financial strengths and profitability to demonstrate repayment ability. 5) Explain how loan repayments will be made through business

Uploaded by

Quốc Đạt
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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How much money do u need

Despite having an idea of the amount you want to borrow based on your application form, the
lender may still want to hear it straight from your mouth during the interview. This is because the
lender wants to press you for what you “need” and not what you “want”.

When answering this question, present yourself in a way that suggests that you’ve carefully thought
of your business needs and that you’re borrowing based on what you need.

2. How will you use the fund?

This is usually a follow-up question to the inquiry above. While the lender may already have the idea
of the purpose of your loan, they still want to hear your explanation on how you’ll use the money to
build your business.

This question is really about how you’ll use the money. If you need to buy a truck, for example, it
won’t be enough to simply say you’ll use the money to buy a truck. You should be able to explain
how a truck is integral to your small business.

Here, lenders are looking for an answer that will assure them that you can pay back the loan. For
example, “working capital” or “expansion/growth opportunities” are good answers to this question—
they ensure the lender that their investment will increase your revenues. Loan requests for “repaying
old debts,” on the other hand, will likely be rejected.

Credit profile

This one’s important because it can make or break whether or not a lender will even ask the next 3
questions

The lender has likely checked your credit profile even before interviewing you. However, you may still
be asked this question in-person to learn more about your creditworthiness and debt management.

When thrown with this question, the lender is giving you the chance to explain yourself, as there may
have been sensible reasons why you’ve missed payments or had your collateral repossessed.

Thus, this is your chance to elaborate on any derogatory marks in your credit report, like a record of
repossession or late repayments. If you have a so-so credit score, your explanation can make or
break the lender’s approval decision.

Business plan

Your business plan has all the answers to this question but being asked in person would give you the
chance to elaborate on your business’ strengths. Thus, your answer should be an elevator pitch that
highlights your business’ profitability and cash flow. You may also need to talk about your business’
bank accounts, investment accounts, credit card accounts, debt obligations, and other financial
details.

Be prepared to answer any follow-up questions that probe into financial hardships that your business
has experienced. A new business owner’s best bet is to show that they’ve been profitable in a
comparable business venture in the past, or have strong expertise and have done their research in
the particular industry of the business.

How to pay back

You will repay the loan through the profit you get from your business, of course. However, your
lender asks this question because they want to have more assurance that you can make the
repayments.

So, aside from discussing the profitability of your business, your answer should discuss your assets
and personal collateral that can repay your debt if in case your business fails.

While on this inquiry, your lender may also ask about your previous business or personal tax returns,
as well as outstanding debts that could affect your repayment commitment.

Collateral

The collateral is an asset, like a land or property, that you pledge as security for the loan. The lender
will take possession of it if you cannot repay your loan on the agreed term. Thus, the collateral is
extremely important if you’re applying for secured business loans.

To a small business owner just getting started, some of this may seem unfair. But it might
help to put yourself in the lender’s shoes: thousands of people apply for business loans every
day, and it’s impossible to predict a winner based on nothing more than a good idea and a
business plan.

So a lot of case study in this banking field are just crazily complicated and boring to explain, and also I
don’t want to go to far from the lesson so no more case study,

here are just financial reports of 02 biggest bank in VN

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