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9 Things You Must Do To Maximize Your
Chances Of Obtaining A Small Business Loan
by: Neil Best
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!
About The Author
Neil Best
This article and other useful info such as sample business
plans, sourcing and applying for small business grants, and
how to find and approach potential investors can be found
at http://www.smallbusinessfinancetips.com/small-business-loans.html.
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