Essentials of Borrowing
Business Loans - The Interview
Bank Manager: Good morning, how are you? Customer: Fine thank you, yourself? Bank Manager: I am very well, thank you. What can we do for you today? Customer: I need a loan for my business. Bank Manager: How much do you need? Customer: Fifty thousand dollars. Bank Manager: What do you need the money for? Customer: I need to buy and equip two new vans and take on two extra employees. Bank Manager: What fraction of the cost does this fifty thousand dollars represent? Customer: A half. My business account currently has a balance of sixty thousand dollars.
I will be using most of that. Bank Manager: How long will you need the money for? Customer: Two years. That should be long enough. Bank Manager: How will you repay the loan? Customer: Having two extra vans and drivers will mean that I can expand the business and take on business that I have been turning away for the past year. I will use some of the profit I make from the extra business to make the repayments.
Bank Manager: Every business needs to borrow money from time to time. Businesses that are not borrowing money are not usually being well run. Even the largest of companies borrow money. Countries borrow money, so why not companies? Customer: I do not like borrowing money. Bank Manager: A company is usually borrowing to pay for investment. The income generated by the investment will more than pay off the loan. Small companies need to invest, and banks realize this. Banks are always willing to consider a loan to a small business. After all, that is where the bank makes its money, on the interest and charges made for loans. I need to be confident that the company can repay the loan, obviously.
Customer: Oh, I can see that. Bank Manager: Your business income has been growing steadily over the past three years and I was going to phone you to see if you needed a loan to expand. Your timing in asking for an appointment was perfect. Customer: OK. That is all then? Is it that easy? Bank Manger: I will post the loan papers to you, just fill in the details, sign them and return them to us. We should be able to pay the loan amount into your account by next Friday. Customer: That is great. Thanks.
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