Commercial Lending: Risk and Relationships (Part 1 of 2)

In the first of a 20 topic question and answer series, John Wroton, Assistant Vice President of Harrington Bank, Chapel Hill, North Carolina, answers key questions which provide insight and a better understanding of the lending process – how risk and your relationship with your banker make a difference. This is the first of two articles on commercial lending.

Recently a panel of bank executives indicated that getting a business loan is about risk and relationships. The degree of risk is assessed on a business based upon a number of factors that are “plugged” into formula. According to the panel if you have a pre-established relationship with your banker, the chances improve in getting your loan. The caveat is that you need to be prepared before you ask – with a robust business plan and concept, cash flow available to make the loan payments, collateral (in most cases) from the business, and a willingness to provide a personal guarantee for the loan.

6 Critical Items for Entrepreneurs

6 Critical Items for Entrepreneurs Starting a business is both one of the easiest and most difficult things a person can do. The easy part is there are few obstacles creating a business in its simplest form. It requires little more than printing a business card and...