In a quick Q&A, Brian Weckman, Electric Ease CFO and partner, shares some hints about how electrical contractors can impress their bankers:
Q: What tips do you have on approaching a banker?
A: Make your business sound as boring as possible and explain how you fit into existing business categories. Bankers don't want to deal with new things if they don't have to.
Q: What common mistakes do electrical contractors make when trying to demonstrate profitability?
A: Current profitability matters much, much more than your projections of future profits. Focus on why you don't really need the money and explain that it's just for opportunities in the future to experience enhanced growth.
Q: What do bankers value most when an electrical contractor asks for a business loan?
A: Bankers want to see the quickest path to loan payoff - especially with a new borrower. The shorter the loan length, the better. If you can show that you can repay early and often, they will be much more inclined to loan you more funds.
Q: What insight do you have on the current competition happening in the market regarding loans right now?
A: There is a massive demand right now from struggling firms for loans. Anything you can do to show that you have an edge will go a long way. Personal guarantees behind most loans and a good personal credit score are essential.