For most people nowadays, finding something means going online and using Google to get the info they need. So if you are in need of construction working capital loans, you just enter that particular phrase and Google will give you pages of results which you can check out.
But while this method has its advantages—it’s certainly easy and convenient for you—it may not always be ideal. After all, quite a lot of the information on bank websites is designed to attract customers. The info may not always be complete, and the fine print may not be to your benefit.
So how should you find these banks instead? Here are some tips:
- Ask your friends in the construction industry where they got their working capital loans. You’re probably not the first person in your network who needed an infusion of cash for their working capital.
Once you find these friends, inquire about their experience and satisfaction. What are the requirements? What type of loan can you get, how much money can you borrow, and what will it cost you? How well were your friends treated by the bank? Your friends will be much more honest about these things.
- Check out online news reports about lenders offering these types of loans. For example, if your construction company is in Minnesota then you may be interested to know about the case of Bald Eagle Erectors. The owner, David Bice, was able to get a $200,000 working capital loan to tide them over until they were able to get a job working on the Minnesota Vikings stadium project. The company had about $1 million in receivable, but the client wasn’t paying them on time. So he had problems paying his crew until he got his loan.
- Approach a bank that you already have a relationship with. Banks like to deal with people they already know, and if you know some bank officials on a first name basis, perhaps you can talk to them.
- Don’t just go to one bank. Try to approach 2 or more banks. Just be honest and tell them that you are thinking of getting a working capital loan and that you’re also negotiating with other banks. Then note down the offers of the banks you talk to.
If you are the type of person or company that banks like to deal with, then the competition may spur them to offer more generous terms. You may be able to negotiate for lower interest rates. Even some requirements such as security or paperwork may be scaled back or waived.
- Work with the SBA. The SBA and other similar eco-development groups are not just for companies who have poor credit and can’t get bank loans. These institutions can help you receive better terms for your loan too.
While getting a loan online is becoming much easier, sometimes you need personal negotiations and face-to-face meetings. Personally going to a bank can help you forge better relationships, and that bodes well for you should you ever need another loan in the future.