Credibility

Along with the position in the negotiation and knowledge of the information process, the third
essential need of both parties revolves around “credibility,” or the ability to make the other party
believe in one’s capabilities.
All too often, we assume that we are credible and make no effort to explicitly confirm it. That
would be like assuming that everyone considers us as frank and honest as we know we really
are!
Of course, relationships in previous operations contribute to gaining initial credibility, and
knowledge of the risk evaluation process, speed in the information exchange process, and
anticipating the other party’s needs are factors that maximize the credibility of our capabilities.

Preparing for Financing

The actions that companies can take to improve the likelihood that they will be granted a loan.
We can classify these actions into seven steps:
I. Preparing for the financing (knowing what you want)
II. Choosing the right bank (understanding the banking business)
III. Negotiating
IV. Deciding
V. Acting appropriately (good bank manners)
VI. Bank risk
VII. Keeping up the relationship

Preparing for Financing (Knowing What We Want)

It is important to do your homework before asking for money. To do this, you have to know:
a) How much money you need.
b) When you need it.
c) What kind of financing to request, that is, the kind of product.

In order to answer the first two questions, you have to make treasury budgets or balance sheets
and profit and loss statements. It is essential to have this information at hand and to clearly
present it to the banks. Any doubt or lack of clarity in this regard will leave a poor image of your
professionalism and may lead the loan request to be denied.

With regard to the third question, it is good to have a clear idea of the kind of financing you
need, whether a credit policy or loan is better, and the period of the operation.

Documents Needed in Requesting a Loan:

● Most recent balance sheet and profit and loss statement.
● Balance sheet and profit and loss statement submitted to the tax authority to calculate and pay the
corporate tax.
● Latest VAT declarations
● Articles of association or documents that show major changes in the company’s structure.
● Information from registries on assets and people.
● Spanish Form 347 related to suppliers and customers.
 ● Tentative balance sheet and profit and loss statement with the new proposed operation.
● Report explaining the purpose of the operation.
Given that official balance sheets―for taxes, audits, or the commercial registry―are never upto-date
(they tend to be six to twelve months old), it is common for banks to request a forecast
balance sheet and profit and loss statement, which must be coherent with the previous ones.

The bank should immediately and at once request all the information it deems necessary, and
the company should immediately provide it. If this is anticipated when providing information,
the process will flow more smoothly and both parties will benefit, especially the company,
because it shows a high level of professionalism. It also shows the financial institution’s efficacy.

How to choose the bank? What kind of banks are there?

Even though all banks look alike, they are not all the same. There are domestic and foreign banks,
large and small banks, leasing and factoring companies, and more. Which is best for you? It is
important to remember what technology makes possible: electronic banking (apps, online, etc.).
It must be simple, practical, and complete, a working tool that helps you in your day-to-day
operations.

Choice of bank: Criteria

When developing your business strategy, banks are an essential element. They provide security
and order when administering the company’s finances through products and services designed
to serve day-to-day operations and help solve your operational and structural needs.
So, what criteria should you bear in mind when choosing a bank? Below are three criteria which
may be helpful.