Yrittäjät valmistautuvat lainaneuvotteluihin

How to prepare for corporate loan negotiations

Your company’s financial standing, liquidity and outlook are the most important grounds for granting a loan.

You can increase your chances of getting a loan and improve your company’s standing in the negotiations. Keep in mind at least the following factors.

1. Are your company’s funds sufficient enough to cover ongoing charges?

The most important indicator of a healthy company that is eligible for financing is the company’s liquidity. You have to be able to cover the following expenses with the income generated by your business: 

  • operating expenses (purchases, salaries, taxes, rent for the business premises etc.), 
  • loan expenses (interest and repayments).

2. Do you have clear plans and outlook for your company?

You have to be able to clearly present in which direction your company is headed. An excellent tool for this is a business plan that summarises your company’s business objectives and revenue logic. 

It’s also advisable to include an investment plan that states whether the company is going to invest in necessary matters only or whether it will also invest in something new or expand operations.

3. Think about possible collateral for the loan

The bank needs collateral for the loan. Eligible collateral includes real security or guarantee. 

Real security

To provide real security, you pledge property. Examples of an object of pledge: commercial or industrial property, a home, holiday home, equities, forest or the company’s movable property.

A person or another party as the guarantor

The guarantor agrees to repay the loan if your company’s repayment capacity weakens so that it can no longer cope with loan repayments. Finnvera grants guarantees for corporate loans, under varying terms and conditions. The guarantee may cover a substantial part (up to 80%) of the corporate loan. Finnvera will charge a guarantee commission and a service fee for any guarantees it grants.

Financed asset as collateral

Leasing and hire purchase provide alternatives for financing your company’s purchases. In these, the asset to be financed serves as collateral.

4. Budgeting, diligent bookkeeping and other reporting

Before the loan negotiations, you should prepare by gathering documents about the business operations. Have the following documents at hand:

  • Financial statements from the last two financial years, auditor’s report if possible and an accounting run if more than six months have passed since the last financial statements.
  • We are also interested in the company’s business plan, cash flow statement and profit budget.
  • If you are seeking financing for a new company, have its business plan and three-year budget plan at hand.

Careful business planning and reporting are signs of a professional approach.