Stage 1: Choosing a Lender
Once a lender has been identified, the next step is an introductory conversation – typically a phone call or video call. This is where both sides start sizing up the deal.
For the lender, it’s a first look at who the borrower is, what the business does, and what the loan would be used for. They’re deciding whether the deal is worth pursuing further and getting an early sense of the terms they might offer.
For the borrower, the consultation is a chance to present the business and loan in the best possible light. It’s also an opportunity to get information on potential loan terms, such as interest rates and down payment requirements.
What the Lender Will Focus On
Every lender approaches this conversation a bit differently, but they’re generally trying to learn about three things:
• Planned Use of Loan Proceeds
What is the money for? The lender needs to understand the deal – whether it’s a real estate purchase, a business acquisition, equipment, construction, working capital, refinancing, or a combination of uses. They’ll want to know specifics: the property address, the purchase price, the business type, and how the proceeds will be applied.
• The Borrower
Who is behind this deal? The lender wants to assess the borrower’s character and relevant experience. Have they operated a similar business before? Do they understand the industry? Are they someone who will be organized, responsive, and reliable throughout a 60 to 90 day loan process? Most of all, can they be relied on to run the business well enough for the loan to get paid back?
• The Business
How does the business perform? The detailed financial analysis comes later during underwriting, but the lender wants a high-level picture now – how long the business has been operating, revenue, profitability, and any obvious strengths or red flags. For acquisitions, they’ll want to understand the seller’s motivation and the transition plan.
Preparing for the Consultation
The consultation is a conversation, not a presentation. That said, coming prepared can make a real difference in how the lender perceives both you and the deal.
• Know the Business
Be ready to talk fluently about the business – how it operates, who its customers are, what the competitive landscape looks like, and what positions it for long-term success. If you’re acquiring an existing business, understand its history, its current operations, and your plan for running it.
• Know Your Financing Needs
Have clear answers for the basics: how much you need, what it’s for, how much you can put down, and why B&I financing is the right fit. Vagueness signals to the lender that the borrower isn’t serious about the deal, or at least hasn’t thought it through.
• Business Plan
A written business plan isn’t required at this stage, but having one – or at least being able to articulate the key elements – demonstrates preparation and seriousness. Cover the business model, growth strategy, how the loan fits into the plan, and what success would look like in the years to come.
• Basic Financials
Have basic financial documents on hand – three years of business tax returns, recent profit and loss statements, and the current balance sheet. The lender won’t analyze them deeply during this call, but they’re likely to ask about them, as they give a more concrete idea of the business. Being able to reference them, or at least share them quickly afterward, shows you’re organized and ready to move.
• Questions for the Lender
This conversation goes both ways. Come with questions of your own – about the lender’s B&I experience, their typical timeline, what rate range and required down payment they’d anticipate, and what they see as the biggest variables in the deal. The answers will tell you a lot about whether this is the right lender for your loan.
During the Consultation
A few things to keep in mind during the call itself:
• Build a Strong Case for Yourself and the Business
This is your opportunity to sell the deal. Be specific about why the business is strong, why the market supports it, and why you’re the right person to run it. Concrete details – revenue trends, customer base, competitive advantages – are more persuasive than broad ideas.
• Be Respectful and Constructive
The loan process is a partnership that can last months. How you come across in this first conversation shapes how the lender approaches the rest of the deal. Being professional, responsive to questions, and easy to communicate with goes a long way.
