The Small Business Development Center of Hampton Roads, Inc. is the service provider of first choice for the region’s small business community. By offering free, confidential one-on-one business counseling, low-cost training, research through SBDCNet and referrals to top-flight service providers, we assist in maintaining and growing this vitally important segment of the region’s economy.
Risk management, not risk taking
Banks need to be repaid the principal loaned and the interest accrued in order to make money. The increasing pressure to create a return for shareholders is clearly at odds with taking risks that could result in losses or regulatory difficulty. Banks are risk managers, not risk takers. They must be as certain as possible of creditworthiness before extending credit to a business: bankers are acutely aware that it takes 10 to 20 times more effort to collect a bad loan than it did to make the loan. Clearly the principal key to getting a bank loan is strong management reflected in the financial performance of the firm, good communication skills, and a knowledge of the expectations of the institution.
Although there are always exceptions, the following are generally considered negative factors by commercial banks:
