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!)
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