Struggling with debt? Why you should talk to your lender

Getting ready to approach your lenderPrior to the pandemic, and the widespread help the Government offered businesses via mainstream lenders, there was a common misconception that lenders aren’t keen to lend to small businesses and will only too readily attach strict conditions to any finance they do provide, especially for businesses struggling with debt.

Yet, contrary to popular belief, under normal circumstances, between 70% to 80% of requests for finance are granted. This is a key reason why you should talk to your lender if you find yourself in such a situation.

In this article, we’ll explain what you should focus on as you prepare to put your case for finance to your prospective lender, particularly when dealing with the challenge of being in debt.

The list isn’t exhaustive but covers many areas that will strengthen any request for finance, ensuring a more productive conversation with your lender.

Getting ready to approach your lender

Drawing a parallel, the process bears resemblance to preparing for an examination. Just as thorough preparation tends to yield improved outcomes, a well-prepared approach substantially enhances the likelihood of a more favourable response. Conversely, a lack of preparation equates to squandering an opportunity to showcase your business in a positive and appealing manner to a potential financier.

In light of this, dedicating time to thorough research on any aspects of business finance that may appear ambiguous is advisable prior to your engagement with the lender. It is noteworthy that the lender does not anticipate you to undertake this entire task single-handedly. Expert assistance is at hand, accessible through professionals such as accountants or finance brokers, who can provide valuable guidance in navigating the intricacies of this process

Building a relationship with your lender

Distinguishing between a purely transactional association with your lender and cultivating a partnership grounded in trust and advisory collaboration underscores a significant contrast. Cultivating a more profound rapport is a gradual process, thereby accentuating the wisdom of initiating such an alliance at an early juncture for the betterment of both your enterprise and yourself.

Exemplify a proactive approach by maintaining consistent communication with your lender. Share instances of success and challenges alike, thereby nurturing an environment of transparency. The ultimate aspiration should be the establishment of a robust reciprocal trust. Authenticity and candour are pivotal to this endeavor.

It is pivotal to recognise that the lender functions as a resource to nurture the evolution of your business, a symbiotic prospect that augments their own interests. From their perspective, a salient annual objective is extending financial support to enterprises such as yours.

In this context, you are essentially working in alignment with their objectives. Your primary task entails constructing a compelling business case that resonates with them, serving as the basis for their provision of financial assistance.

Getting further advice

Gaining a deeper understanding of this procedural framework is a straightforward endeavor, given the abundance of complimentary information and guidance available. A notable illustration is our Finance Hub’s repository of articles, which serves as a valuable resource to enhance your comprehension of optimal finance acquisition strategies, cash flow enhancement techniques, and effective debt management solutions.

Talking about your business

In relation to your business, it is imperative to convey the subsequent aspects to your lender:

  1. The historical trajectory of your business.
  2. Your strategic trajectory for the medium to long term, encompassing a span of 1 to 3 years.
  3. The instrumental role the funding will play in facilitating specific initiatives.
  4. The distinctive challenges endemic to your industry or sector.
  5. The pivotal figures integral to the functioning of your enterprise.
  6. The intricate blueprint governing the succession strategy within your business.

Talking about figures

In readiness for engaging in a discourse regarding your financial data, it is prudent to ponder upon a series of inquiries:

  1. Do I possess the assurance to effectively expound upon my business’s historical figures or projected forecasts?
  2. Am I capable of elucidating the insights these numerical representations convey about the state of my enterprise?
  3. Have I gained a comprehensive grasp of the concept of EBITDA and its utility in a lender’s assessment of my financial viability for securing finance?
  4. Has my business subjected its forecasts to rigorous testing? If affirmative, what methods were employed and who participated in the process?
  5. Does my business incorporate any salient key performance indicators (KPIs)? In such a case, am I adept at outlining the progress made towards attaining these benchmarks?

Talking about yourself

It’s important to be honest with yourself and understand your personal aims, drives and fears. Specifically, the following:

  • What are you hoping your business will achieve for you and your family in both the short term and long term?
  • What drives you?
  • What keeps you awake at night?

If you’re aware of what’s driving you, and your potential weaknesses, you can guard against them causing you to make mistakes.

Talking about your business plan

Dedicating adequate time to meticulously review your business plan bears paramount significance. For instance, contemplate the subsequent facets:

  1. What extent of research have you conducted concerning your market dynamics, customer base, and supplier landscape?
  2. What quantifiable indicators will affirm that you are on a trajectory of progress?
  3. To what extent have you pursued external counsel and guidance?
  4. Have you engaged with other adept professionals to glean insights?
  5. Have you devoted effort to refining your presentation of the plan, prior to your scheduled interaction with the lender?

Talking about the money

Prior to engaging in a dialogue with your lender regarding the sought-after financing, ensure your readiness to address the following inquiries:

  1. What is the precise quantum of funding you require?
  2. Could you elaborate on the methodology employed in determining this specific amount?
  3. What constitutes your vested interest in this financial endeavour?
  4. Can you furnish an itemized breakdown delineating the allocation of these funds?
  5. How does the acquisition of this finance align with your strategy to surmount prevailing business obstacles?
  6. Is the requested sum a genuine reflection of your needs or merely influenced by perceived lender inclinations?
  7. How will you substantiate your capacity to honour the debt obligation?
  8. Have you explored alternative avenues for securing finance?

Other important things to consider

Additionally, allocating time to contemplate alternate potential scenarios that may subject your business to strain is judicious. These scenarios encompass:

  1. Contingency Planning: What alternative strategies do you have in place if circumstances deviate from your initial projections?
  2. Interest Rate and Trade Fluctuations: How would your business navigate challenges stemming from an escalation in interest rates or a downturn in your industry?
  3. Risk Assessment: What are the prevailing predominant risks inherent in your sector, and more specifically, within your own enterprise?
  4. Impact Analysis: In the event of these risks materialising, who among your stakeholders – be it customers, suppliers, or staff – would be most significantly affected? Furthermore, what immediate measures could you adopt to mitigate these impacts, and what long-term strategies would you employ for resolution?

Undoubtedly, it is imperative to substantiate your business’s resilience in the face of these pressures convincingly.


In conclusion, the insights shared throughout our dialogue underscore the significance of proactive and strategic engagement when seeking financial support, particularly in the face of challenges such as debt. By dispelling misconceptions, fostering open dialogue, and comprehensively addressing key considerations, we lay the foundation for a successful partnership.

Remember that transparency, well-prepared plans, and a deep understanding of your business are pivotal in not only securing financial assistance but also in forging a resilient path forward. Your dedication to these principles positions your business on a trajectory of growth and stability, guided by the expertise of both your lender and other professionals.

As you navigate these complexities, rest assured that your efforts to communicate effectively and strategically will greatly enhance your prospects for a prosperous financial future.

Steve Jones Profile
Insolvency & Restructuring Expert at Business Insolvency Helpline

With over three decades of experience in the business and turnaround sector, Steve Jones is one of the founders of Business Insolvency Helpline. With specialist knowledge of Insolvency, Liquidations, Administration, Pre-packs, CVA, MVL, Restructuring Advice and Company investment.