9 Things
You Must Do To Maximize Your Chances of Obtaining a Small Business Loan
To get
approval for your small business loan application, you must be able to
meet the lending criteria set down. Some organisations are more risk
averse than others, and will therefore have more stringent criteria. To
vastly increase your chances of a successful funding application, you will
need to present the following information:
1. The
reason for the loan. The lender will be looking for something that fits
within the normal range and expertise of your business. The amount may
cover a number of items, so you will need to cover each.
2. The
amount required, and the repayment term of the small business loan you
want. (e.g. $10,000 term 5 years, payable quarterly).
3.
Details of how you will repay the amount borrowed. For example, “From the
increase in profits of reduced running costs of the Whizzbang Go4It”
4.
Details of security you will be able to offer to the lender. This will act
as reassurance for the lender. If you’re not prepared to put up some
aspect of security, then why should they?
5. You
will need to include your business plan which will serve to answer
essential questions relating to management capabilities, information about
the market you operate in. What kind of business you are in etc.
6. 3
Years financial statements. You will need to present quality financial
information from your accounting software, preferably signed off by your
accountant or tax advisor.
7.
Latest Set of Management accounts. Again produced from your accounting
software.
8.
Accounts receivables (debtors) and payables (creditors) ageing reports.
9.
Principals financial statements. – Particularly required if some form of
security is necessary.
If you
are a new company, the emphasis is going to be on your business plan , and
the security (also called collateral) you or your business can provide
against the loan.
You must
take the time to practice presenting your case to the bank or lender to
iron out any glitches. Practice on your colleagues and family (you never
know, they might be so impressed, they'll invest or lend!). It may help to
role play the lender and come up with as many pointy questions as
possible. The more time you take the better your chances will be. (But
remember, don’t fall into the analysis paralysis trap!)
Good
luck!
Neil Best may be contacted at
Click here.
Neil Best has been enjoying life for some time now.
