Starting a new school is a tedious job although it requires a lot of knowledge of the requirements, understanding of the whole procedure and most of patience. One of the most difficult hurdles that the new owners come across is finding money for their business. Availability of finances is a very important pre-requisite for starting a school. The best likely sources of funds are your friends, families and savings. However, it is often recommended to consider the institutional sources also. These days various financial institutions, banks etc. provide loan facility to the customer. But for securing a bank loan, one needs to have a good previous track record. Therefore, assess and evaluate your present financial situation by detailing down the assets and the monthly income. Look for a dozen of alternatives and lenders that specialize in providing the loan facility.
Various steps can help to improve your chances of getting the required bank loan.
Remember in mind that banks need to make loans: Search for a bank or a financial institute that has granted loan to other familiar entrepreneurs in the education industry. Look for banks that indulge in small business financing because your business is new to the market.
Be thoroughly prepared before going to your banker’s office to request a loan: You need to prove to the bankers that granting loan to you will prove to be an advantage and is a low-risk proposal. Before going to the bank, ensure that you have a completed loan application with the copies of the required documents.
Learn to answer every question that the banker has: Remember, that the most influential tool of cooperation and negotiation is the amalgamation of information and preparation. A confident, assured, thoroughly prepared borrower who provides answer to all the basic questions of the banker will have his/ her loan approved. To show the scope of your preparation, the business plan should also include answers to your banker’s queries. These questions asked by the bankers include:
- amount of money required
- duration of the loan period of the loan
- purpose of requirement of such an amount
- date and mode of repayment of the loan
- What will you do if you do not get the loan?
Avoid a negative attitude: Keep your negativity away from you. Present yourself to a banker as an entrepreneur who has enough credibility in the market and will repay the loan and that to on time. Enhance your image in front of the loan officer by presenting him with a promotional material about your business like brochures, ads, leaflets, articles etc.
Dress in a specialized manner: This is one of the most important business transactions for your school, so dress in a professional manner when you go for a meeting with the loan officer. Your appearance will definitely enhance your image and will prove to be an advantage to you.
Make sure that all your documents are neat, readable, understandable, organized and presented in an attractive manner: Get all your loan documents typed as handwritten documents give an unprofessional, outdated look. Keep them in a nice business file.
Be confident: A positive approach with the confidence boosts your chances of getting the loan sanctioned. Demonstrate that your school will lead to success and huge profits with the betterment of the society out of the money that the bank will lend to you.
Keep trying different financer until you get your loan: The best way is to give banker a reference from a successful entrepreneur, a colleague or a friend to improve your position. Find a companion, friend or associate that is in good standing with the bank to give you a good referral.
Lastly, keep this in mind that getting a loan for the first time is not an easy task as the bankers and the financing institutes grant loans easily to the old customers in comparison to the new ones because of the risk of credibility.