DURBAN - SMEs who are not adequately prepared when applying for credit often develop an incorrect assumption that banks are not open to lending.
Valentine Jingura, Head of Pricing at FNB Business said that the banking sector is eager to lend to SMEs as means to stimulate economic activity and broader GDP growth. As responsible financial services providers, banks are bound by a set of guidelines and principles, which prohibit reckless lending – to protect consumers and businesses.
Accordingly, SMEs who seek financial assistance should familiarise themselves with the credit application process, and what lenders require, to increase their changes of being approved.
There are three things that banks generally look for when assessing an application for business credit; history, affordability and security.
When applying for a loan, the business needs to demonstrate that it has a healthy bank account and turnover, good credit history and profile, no outstanding bills and judgements. In a nutshell, banks need to determine that the entrepreneur and business have a good financial track record.