How to get the right startup loan advice

Seeking opinions from your accountant or friends will get you started, but nothing beats consulting with the experts 

It is common to look within your circle of influence when seeking a startup bank loan and getting your business off the ground. Friends and your accountant will all have opinions to offer. But while this helps get your thinking on the right track, every startup is unique and nothing beats expert advice.


Small Business Smart Business program coordinator Liz Grant says those close to you will come from a personal perspective and will be worried about you, especially when it comes to taking out a sizeable loan.


“Often you’ll get the, ‘oh it’s too risky, don’t do that’, or ‘remember when you tried that before and failed?’” says Grant.


It is vital to balance this with objective, expert opinions, Grant believes.


“What you’ll find with, for example, a small business mentor or a mentor funded by state or federal government is they still have a brilliant background and have seen every sort of startup under the sun, but they’re not there to kill your dream.


“They’re there to make you think and answer all the questions. They will ask you questions like, have you thought about who your target market is? How are you planning to promote yourself? What margins have you been looking at? They get you thinking about finance as a business, not a hobby.”


Brand and marketing consultant Bella Katz, who specialises in positioning businesses for new development stages, says a big indicator of business maturity is admitting that you don’t know everything and need advice.


“To get a mentor in any field, you need a certain degree of shamelessness,” she says. “There’s no secret to engaging with someone you respect, and there’s really only one tried and tested technique that works like a charm – you ask them.


“No one person has all the answers and the more professionals you can surround yourself with, the better.”


Business mentors can also include a business banker, also known as a business relationship manager. These professionals will be integral to ensuring you get the right loan for your startup needs.


Each lender will dedicate a relationship manager to look after your case. They will be your financial guide, and they have the authority to represent your case to the central lending body.


It is helpful to find a bank that has loan specialists who will better understand your industry, the Australian Banking Association (ABA) recommends. The ABA says if the lender knows the challenges of your sector, they will have a better appreciation of the conditions your business is exposed to.


The ABA also advises that startups approach a bank that either has a startup focus or has small business support in place.


Grant says each business relationship manager will have different backgrounds and take different levels of risk.


“Even though the bank will have broad strategies, different business bankers know different industries and will be more willing to lend in one and less willing to lend in another because of experience,” she says.


Small Business Works chief executive officer Alan Maddick isn’t as concerned about the banker’s industry expertise, but more about their approach to your individual case. He recommends startups sit with their business relationship manager at least twice a year to ensure best practice.


“I believe having a business relationship manager that is open and accessible would be the number one attribute to look for, followed closely by being familiar with the bank’s products and policies as they relate to your space,” Maddick says. 


Maddick thinks the business relationship manager should be part of a broader support team for your startup, including a qualified accountant and a lawyer that you know and trust. 


Written by: Nicola Trotman


This article is sponsored by Australia and New Zealand Banking Group Limited ABN 11 005 357 522 (ANZ).


Success starts here

If you’re thinking of starting a small business, or have recently launched one, you want to do everything you can to ensure its success. Visit the $2 Billion Lending Pledge to find your local ANZ Small Business Specialist and get an indication of how much you could borrow.


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