Good Answers
By Cynthia E. Griffin
Before getting a bank loan, you'll have to face plenty oftough questions from your banker. Here, George Falconero, a partnerin Oaks, Pennsylvania, CPA firm Maillie, Falconiero & Co. LLP,offers the best answers to the three toughest questions you'llbe asked:
Why do you want to borrow money instead of using yourpersonal resources?
Answer: "My personal funds will be a reserve in the eventmy business experiences hiccups. I want to be in a position todevote my resources to the business without worrying aboutarranging financing for ups and downs."
What is the basis of your financial projections?
If you are relying on competitors' information, have amarket study you don't want to get out to the competition, orare using your own best estimates, this may be a problem, saysFalconero.
"Handling this question is a matter of presentation. If youdon't want to reveal your source or are relying on a bestestimate [as are most small businesses], highlight your experiencein the industry and your business knowledge."
Why don't you finance the project in parts?
Be honest. Say it's probably not worth your efforts to dothe project on a piecemeal basis and that you really want to workwith a lender willing to support the project 100 percent.
