I
host this blog out of a strong passion for start-ups. It is so
rewarding to grow an idea from a white piece of paper to something
viable and profitable. But sometimes, things are not going your way
on planet start-up. In a previous post, we highlighted five reasons
why you were declined a start-up loan by the bank.
You have an
idea, a project, and you establish a business plan. You write it up,
do the math, and go to the bank to take a start-up loan.
Bank
says no. What now?
At this point, it is time to think carefully
before you take the next step. This 'NO' might be a good thing.
Please hear me out.
Banks have great resources and tons of inside
information you can't Google on the internet. Imagine a company XYZ
with a bank account. The bank knows everything about XYZ. It views
every transaction, what they make, when they make it, who are the
clients, who are the suppliers, how much an average client buys, how
much refunds, etcetera. Combine all this in a database of a big bank,
and the information is priceless.
If you plan to open a
restaurant, a salon, a garage, or a lawnmower service, you can bet
that the bank has other similar businesses in their portfolio. Those
businesses might be in your street or your city. Hell, they might
even host the bank accounts of your biggest future competitor.
So
if that bank declines you a start-up loan, you must find out why. The
bank will not always give you a reason, but if it is possible, try to
approach the representative for more details.
In case the bank
does not believe in your project, you should consider the possibility
that it is admittedly not profitable. That refusal might have saved
you from bankruptcy.
In case the bank was not entirely convinced
with your business plan, you might want to go back to the drawing
board and finetune your project. Maybe your future business should
offer more services or less, maybe going bigger or smaller. Re-think
it, deepen it out. In the end, you might end up with a superior
project because of the initial decision of the bank.
Consider
banks as a second opinion. And instead of instantly fighting their
refusal to fund it, use their input, double-check your project, make
it better.
Don't beat yourself up on failing here and there; it's
part of the journey. You will lose battles, try to win the war!
Top
10 about the author; Erik Victor
1.
is a serial entrepreneur and started his career in Engineering
2.
currently a majority shareholder in corporations in the fields of
Industrial Real Estate, Wealth Management & Investment funds, and
International Tax Planning
3. has a passion for the dynamics of
young businesses and actively endorses several start-ups
4. is an
engaged member of several think-tanks and an international conference
speaker
5. has a business footprint in six countries
6. speaks
five languages
7. personal life - resides in Europe
8. Erik
(48) is known as a discrete and private person, a family man
9.
loves to spend his limited holidays in the mountains or at sea on his
yacht
10. Erik has no social media accounts
Comments
Post a Comment