The day-to-day life of a business owner is full of negotiations: with suppliers, with clients, with employees…

Today I am here to give you some tips that can help you in one of the most important negotiations in the history of a company: the negotiation with the bank.

As you may know, dealing with different bank policies and regulations can be complicated. When it comes to getting a loan, renegotiating a debt, or simply requesting a service, knowing some bank negotiation techniques can be a big help. To be successful in negotiation, it is essential to be well-informed and prepared. 

Our bank is another supplier and can sometimes help us to undertake new purchases or new business projects. 

They are not the solution to our problems. Of course! But they are an important part of that solution, in many cases.

If we want our company to last over time, we must know well when and how we should negotiate with our bank.

With a good negotiation strategy, you can get better results. I’ll tell you how to apply negotiation techniques with your bank!

7 negotiation techniques to apply with your bank

1  Be clear about your needs

Before you start negotiating, you should know exactly how much you need and what you need it for.

This will influence the time frame of the trade (short, medium, or long) and the trade itself. So it is very important!

The manager of a bank branch will always look more favorably on a transaction whose destination is clearly stated by the applicant than on one in which it is not clear what the money will be used for.

Depending on the term, you can choose from different banking products: if the financing is short-term, you can opt for a credit policy, if it is medium-term, a personal loan, and if it is long-term, a mortgage-secured loan.

2  Plan the interview

Once you have decided on the amount you need and the deadline for requesting it, it is time to plan the interview with the person in charge of the bank branch . Gather all the necessary documentation (annual accounts, taxes, pro forma invoices, budgets, etc.) and, above all, do things in good time.

Ideally, you should not be in a hurry in order to be able to negotiate well with the bank, so it is better to notify your needs in advance and not arrive at the bank needing to have the money for the next day.

3  Be transparent

It may seem obvious, but there are many businessmen who are not transparent with their banks. And if you want to succeed in negotiation, you must be. There is little point in applying other negotiation techniques if we are not able to speak sincerely.

Make it clear how much you need, what you need it for and how long you need it. And, of course, never present false or “false” accounts, as the bank will investigate the transaction and will almost certainly discover if you are trying to deceive.

Good management requires transparency. This is how you can reach a financial agreement with your bank.

4  Show your strengths and weaknesses

Linking to the previous point, it is very good that you communicate to the bank both your strengths and your weaknesses.

It is good to show your strengths, your advantage in the market : this may be the quality of your products, your dominant position compared to the competition, your historical track record, etc. Show what your professional activity is and your position in the market with transparency.

But it is also very good to be honest with the bank about your weaknesses, especially if you have plans to correct them. The bank will surely appreciate that you do not hide information from them and that you discuss how you are going to turn those weaknesses into strengths. This spirit of development and ability to seek resources will help you in your negotiation.

5  Negotiate with several banks

The ideal is to work with several banks . This way you will not depend on the bank’s commercial policies or the character of the person in charge of the branch you are a client of.

If you are negotiating financing, it is better to present the proposal to several entities , because this way you will have several prices to compare and it will help you put pressure on the entity you have chosen, if it is not the one with the best conditions.

Each bank has its own commercial policies, and sometimes some are more aggressive than others. This always plays in your favor when negotiating; if you are a good client, your financial institution will not want to lose you.

6 Be patient

Haste is often a bad advisor.

You must be patient and look for financing in advance. Schedule interviews with each bank manager in advance and make your needs clear.

If the bank knows that you are in no hurry for financing, they will think carefully about the conditions they have to offer you to convince you . If they detect that you are in a hurry, they will give you the best conditions… but for them!

Not being in a hurry is, without a doubt, a great benefit when negotiating with the bank.

7 Analyze and decide

Once you have all the proposals on the table, it is time to review them carefully and decide on one.

Look at them all together to see what they are similar to and what they are different from. If you are happy with one bank and would like to do the transaction with that one, use the terms of the others to try to get them to match them. You only lose the time of the call, and you can get a better price from the bank you are happy with.

The best negotiation techniques for requesting financing

 One of the most common negotiations we usually do with banks is to request financing.

It may be because we want to open a market in another area, or because we need to expand our facilities, or because we have a new business idea and need funding to get started.

In these cases, requesting financing can be a complex process. Apparently! But with the right negotiation techniques, you will see that it is easier and more effective.