Crown bank visits with success

Only those who are well prepared will leave a good impression on the bank and thus achieve their goals more easily.

This article is part of the special feature GründerNavi – for founders and young companies

Starting a business, making new investments, or extending existing business loans – everyone has to go to the bank at some point, and not just to withdraw money. Choosing the right financing partner is crucial . In addition to the specific services offered, fast decision-making processes, objective advice, and flexibility regarding special requests are important. At the same time, business owners should be able to rely on the bank to act fairly during times of crisis and to be accommodating in problematic situations . To achieve this, it's essential to understand the bank's internal processes, the criteria that must be met, the available flexibility, and who ultimately decides on the loan.

Creditworthiness and collateral are essential factors for financing

Furthermore, you should add a few points to your individual wish list that are important for a long-term partnership with the bank. "Generally speaking, there are many advantages to choosing the bank where you already have an account and know them personally," says Dr. Robert Mayr, CEO of Datev . "Because the personal connection to your assigned advisor shouldn't be underestimated. Your contact person's subjective assessment still plays a significant role in the loan decision."

Whether a bank approves financing depends primarily on two factors: sufficient creditworthiness and collateral. The bank bases its decision on whether the entrepreneur can afford the agreed interest and repayment installments in the future. "The bank assesses this debt service capacity based on the company's past and present financial performance as well as its future prospects," explains tax advisor Robert Mayr . "At the same time, it examines whether the default risk is acceptable. Lower collateral can be offset, at least to some extent, by a good credit rating."

As up-to-date as possible

If the entrepreneur brings not only commercial expertise but also persuasiveness, flexibility, and a sense of reality to the meeting, a great deal has already been achieved. Furthermore, the documents must be coherent: The self-employed person should ensure that the figures presented are as up-to-date as possible. They should also be able to competently explain the data: "It has a convincing effect on the bank employee if the entrepreneur knows his figures and has studied them intensively. This demonstrates business competence – which ultimately leads to a positive assessment of the entrepreneur's personality," according to Robert Mayr's experience. Anyone who feels unsure about this can seek help: "If necessary, the tax advisor can also accompany the entrepreneur to the meeting and provide additional detailed information during the negotiations."

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The analysis of the financial situation is the core of the credit assessment. The bank employee compiles key business figures from the submitted statements and compares them with previous year's figures. The industry environment also plays a role. To ensure the most up-to-date figures, a business analysis should be presented in addition to the most recent annual financial statements. Planning – such as a profit forecast and a liquidity plan – is helpful for the bank to assess future developments.

Caution: The entrepreneur should make these forecasts as realistic as possible; exaggerated scenarios will only have a negative impact in every respect. It is also important to remember that this conversation is about a business transaction from which both sides should benefit. Ultimately, it is the professional demeanor that will be decisive. More information is available from Datev.

Checklist for the bank meeting

You are well prepared! You have compelling, up-to-date documentation, and you have strong arguments and a negotiation strategy.

• They value good conversation! You have made an appointment, allowed enough time, and presented yourself confidently and professionally.
• change the perspective! You know what the bank employee expects from you, are prepared for it or ask your tax advisor
  to prepare.
• Consider failure! You record the results of the discussion in writing, obtain comparative offers and examine alternatives together with your tax advisor.
• After the bank meeting is before the bank meeting! You'll be having loan discussions again and again. The initiative for bank meetings should come from you, because the player always has the advantage.

The criteria used to assess creditworthiness vary from bank to bank. However, the criteria themselves are quite similar and include