You must be able to meet the lending criteria set down in order to get approval for your small business loan application. Some organizations 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:
The reason for the loan. What the lender will be looking for is something that would fit within your business' normal range and expertise. The amount may cover a number of items, so you will need to cover each.
Make sure you have the amount required and the repayment term of the small business loan you want. (e.g. $10,000 term 5 years, payable quarterly).
Do you have the details of how you will repay the amount borrowed?
Make sure that you include the details of security that you will be able to offer to the lender. Because of this, the lender will be offered some reassurance. You need to be prepared to put up some aspect of security because if you don't, then why should they?
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.
Include the 3 years financial statement. Another thing you will need to present is quality financial information from your accounting software and preferably your accountant or tax advisor has signed it.
Remember the latest set of management accounts. Once more, this is produced from your accounting software.
Accounts receivables (debtors) and payables (creditors) ageing reports.
Include the principal financial statements - Particularly required if some form of security is necessary.
The emphasis is going to be on your business plan if you are a new company as well as the security or the 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. You never know if your family and colleagues will be so impressed they'll invest or lend, so you can practice on them too. It also wouldn't hurt to role play the lender and come up with as many pointy questions as possible. You will have better chances as long as you take more time. Just remember to avoid falling into the analysis paralysis trap.
Best of luck!
The reason for the loan. What the lender will be looking for is something that would fit within your business' normal range and expertise. The amount may cover a number of items, so you will need to cover each.
Make sure you have the amount required and the repayment term of the small business loan you want. (e.g. $10,000 term 5 years, payable quarterly).
Do you have the details of how you will repay the amount borrowed?
Make sure that you include the details of security that you will be able to offer to the lender. Because of this, the lender will be offered some reassurance. You need to be prepared to put up some aspect of security because if you don't, then why should they?
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.
Include the 3 years financial statement. Another thing you will need to present is quality financial information from your accounting software and preferably your accountant or tax advisor has signed it.
Remember the latest set of management accounts. Once more, this is produced from your accounting software.
Accounts receivables (debtors) and payables (creditors) ageing reports.
Include the principal financial statements - Particularly required if some form of security is necessary.
The emphasis is going to be on your business plan if you are a new company as well as the security or the 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. You never know if your family and colleagues will be so impressed they'll invest or lend, so you can practice on them too. It also wouldn't hurt to role play the lender and come up with as many pointy questions as possible. You will have better chances as long as you take more time. Just remember to avoid falling into the analysis paralysis trap.
Best of luck!
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