How to Prepare for a Meeting With Your Bank About Financing
For many small businesses, a loan or line of credit starts with a conversation rather than a form. You sit down with an account manager at your bank or credit union, explain what you need and answer questions about your business. That first meeting shapes how your request is understood and what the lender asks for next.
You cannot control the lender's decision, but you can control how well prepared you are. Here is how to get ready, what to ask while you are in the room and what to do afterwards. The same approach works whether you are meeting a bank, a credit union or another lender.
Set a clear purpose for the meeting
Before you book, decide what you want to come away with. A first conversation about your options calls for different preparation than a meeting to hand over a complete application.
Book the right person. Ask for a business banking advisor or account manager rather than a general branch appointment, and say in a sentence or two what you would like to discuss.
Ask what to bring. Document lists vary from lender to lender, so asking ahead can save you a second trip.
Know your ask. Be ready to state the amount, what it will pay for, when you need it and how you plan to repay it.
Match the product to the need. Assets you will use for years, such as equipment or renovations, usually suit a term loan. Short gaps between paying your costs and getting paid by customers usually suit a line of credit. For example, an Edmonton landscaping company might finance a new truck with a term loan and use a line of credit to cover spring wages before customers pay.
Prepare a one-page summary
A one-page summary keeps the conversation on track and gives the advisor something to share with colleagues who review requests. Cover:
what the business does, who owns it and how long it has been operating
who your customers are and how you reach them
key numbers, such as last year's revenue, recent monthly sales and any existing debt
the request: amount, purpose, proposed repayment period and how payments will be covered
what you are putting in yourself and what security you could offer
Bring printed copies, and offer to email it a few days ahead so the advisor can read it first.
Gather your documents in one place
Keep your paperwork in one folder, paper or digital, so you can share it quickly. Depending on your business and the size of the request, that may include:
a business plan with financial projections, especially if you are just starting out
a month-by-month cash flow forecast for at least the next 12 months that includes the proposed loan payments
financial statements for recent years and the current year to date, if you are already operating
recent personal and business tax returns and notices of assessment
a personal net worth statement listing what you own and what you owe
quotes for the equipment, renovations or inventory you plan to buy
registration or incorporation documents, business licences and any lease
Rehearse the questions you will likely hear
Advisors ask questions to understand the risk in your request. Practise answering these out loud, briefly and without notes:
What exactly will the money pay for, and why now?
How will the business make the payments, and what happens if sales are lower than you planned?
How much of your own money is in the business?
Who are your main customers and competitors?
What experience do you and your team bring?
What debts do you already carry, personally and through the business?
What security can you offer?
If something in your history needs explaining, such as a slow year, a late tax filing or a past credit problem, raise it yourself. Give a short, factual account of what happened and what has changed since. Review your personal credit report before the meeting so nothing in it catches you off guard.
Questions to ask your bank
The meeting is also your chance to understand what you would be agreeing to. Consider asking:
Which type of financing would you suggest for this purpose, and why?
What would the interest rate be, would it be fixed or variable, and what fees would apply?
What are the term and repayment schedule, and can I repay early without a penalty?
What security or guarantees would you need from the business and from me personally?
What conditions or ongoing reporting would apply, such as yearly financial statements or financial ratios to maintain?
How long does a decision usually take, and who will be my main contact?
If your business, or the one you are starting, operates in Canada with gross annual revenues of $10 million or less (the limit at the time of writing), ask whether the lender offers loans under the federal Canada Small Business Financing Program. You apply directly to a bank, credit union or other financial institution, not to the government, and the lender alone decides whether to approve the loan.
After the meeting: follow up and compare
Write down what you heard. Note the options discussed, any figures mentioned and each follow-up item with its due date.
Follow up promptly. Within a day or two, send a short email that thanks the advisor, confirms next steps and attaches anything requested.
Get offers in writing. Compare them on total cost, repayment terms, security and conditions, not on the interest rate alone.
Review before you sign. Have your accountant or an independent lawyer review a commitment letter or loan agreement before you accept it.
Treat a no as information. Ask what would need to change for a yes, such as stronger cash flow, a larger owner contribution or more security. Another bank or credit union, or the Business Development Bank of Canada (BDC), a federal Crown corporation, may see your request differently. The Government of Canada's Business Benefits Finder can also give you a personalized list of programs and services to explore.
How First Global Citizen can help
We help founders and small-business owners prepare for conversations with banks, credit unions and other lenders. That can include a business plan, a monthly cash flow forecast, a one-page summary of your request, a clear explanation of how you will use the funds, a document checklist and a practice run of the questions you are likely to face. Learn more about our business plan and funding readiness services.
We are not a lender or loan broker, and the lending decision always rests with the lender. We quote our work as a fixed fee in a written proposal, with any government or registry fees passed on at cost, and when you need accounting, tax or legal advice, we can coordinate with independent licensed professionals. To get ready for your next bank meeting, book a free consultation.
This article is general information only. It is not legal, tax, accounting or financial advice. Fees and requirements can change, so confirm current details with the relevant government agency or registry. For advice about your situation, consult a qualified professional.
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