Acquiring funding sometimes takes longer than borrowers anticipate. They often wonder why the process can take so long and become frustrated with lenders if they don't understand the process.

Understanding Why Good Proposals Can be Turned Down

It is important to understand why loan proposals can be turned down. Anytime a lending source finances a project, it basically "rents" its shareholders' and depositors' money to the borrower. Repayment of the loan--with interest equal to the risk--is the institution's number one objective. A loan officer who does not scrutinize every loan proposal with a magnifying glass likely will be looking for a new job quite soon!

The officer with whom you deal most likely will not be the decision maker. Most institutions have loan committees comprised of officers you never will see or meet. The committee may only meet bi-weekly or once a month. In the case of national institutions, members may be in distant cities. That means the people making the actual decisions will only have your paperwork in front of them. They rarely meet potential borrowers, and that is why your loan package is so important. It speaks for you, proving the viability of your project and why it makes sense for the lender to loan you money.

Institutions typically specialize in certain types of loans and industries. Some simply will not fund start-up businesses, and others may deal only with businesses that have been established for a certain number of years. Lenders generally do not publicize such limitations. That is why it is wise to seek assistance from a business consulting firm such as BFN. We know which lenders favor different types of projects and industries.

Occasionally borrowers inadvertently damage their prospects during the borrowing process. They may miss home or car payments, quit jobs prematurely, submit loan applications to numerous institutions, or apply for several new credit cards--thereby triggering inquiries about (and damaging) their credit histories.

Borrowers sometimes overstate the likely market value of assets listed as collateral, such as their homes or rental properties. The project can then be derailed if appraisals come back at much lower levels

Those kinds of situations can slow down the loan process, and BFN helps clients avoid them. Our clients are kept informed of potential problems, how to avoid delays, and how to overcome the occasional glitches. Our guidance save time, money, and effort and puts clients' businesses on the road to success.

Just give us a call or send us an e-mail message to see how we can help you get the capital you need.

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