With economic uncertainty in the future for many businesses, getting your clients' lender ready is vital. Your clients may be looking to boost their cashflow or invest into their business, and the quickest and easiest way to do this can be a loan from a bank or other loaning group.
But what happens when their loan is refused?
In this week’s blog post we’ll be looking at the best ways you can prepare your clients for loans - when your client grows, so does your customer base.
1. Preparing the Documentation
You can advise your clients on what documents they will need to prepare for their applications - if you’ve helped them with documentation in the past, you can use this, or you can run through what will be expected of them.
2. Separate their business finances from their personal finances
If your customer is using their personal finance account for business, now is the time to break away. Having a separate account for their business will not only help them separate things mentally, but it will give them a business credit score, thus separating their business and personal credit scores. It will also give them more credibility.
3. Update their business plan
Some lenders, usually banks, require a businesses’ business plan before handing out money. Discuss this with your client, and offer advice on the financial side of the plan. If they haven’t updated their plan recently, now would be a good time to do so.
4. Discuss their needs
If the money isn’t for a specific project, it can be difficult for business owners to know how much money to apply for. Discuss with your client how much you think they could apply for, and be realistic - don’t let them apply for money that they won’t be able to pay back comfortably.
5. Boosting their credit score
When you’re preparing your clients for loans, it’s important to check their credit score with them, as this will always be something the lender looks at. You can look through one or all of the main providers. If their credit score isn’t great, look through the reasons why and make a plan of action. This could include reducing their debtor days and reducing their payment lead times. To do this, why not use itsettled?
Here at itsettled we help accountancy firms across the UK improve and scale their credit control operations.
Our cashflow protection software identifies payment risks and automatically collects overdue invoices. Saving your clients time, improving their working capital position and allowing them to thrive.