Getting a small-business loan is often challenging, the following list can assist you in gathering the necessary information to prepare for a loan.
Loan Proposal: A written statement describing your business and its history, stating how you will use the loan proceeds and outlining how you plan to repay the loan. In essence, you are putting into words why the bank should grant you the loan.
Purchase Contract: Required if loan proceeds will be used to acquire a business or real estate.
Small Business Loan Request: (form enclosed)
Personal Financial Statement: (form enclosed) AND 3 years tax returns for any principal who has a 20% or greater ownership interest and for all guarantors and key officers
Resume: for each of the principals including business background and personal information (form enclosed)
Statement of Personal History: (SBA form 912 enclosed)
Financial Statements: These statements should describe the condition of your business and be presented in a format which is generally accepted for financial reporting. Included should be:
- Balance Sheet for the last three fiscal year ends
- Income Statement showing profit and loss for the last three fiscal year ends; three years of tax returns
- Interim Financial Statement: (90 days or less) to include balance sheet and income statement
- Cash Flow Projections which show how much cash will be generated in the future to repay the loan
- Accounts Receivable & Accounts Payable as of the same date as the interim financial statements which break out receivables and payables in 30, 60, 90 and past 90 day old categories
- Earnings Projection for the first three years of business and detailed business plan if you are requesting funds for a start-up business
- Schedule Of Business Debt (form enclosed)
Collateral Listings: Itemize all collateral and provide the present market value of each item.
- Present business plan to loan officer.
- Loan officer takes business plan to loan committee
- Loan committee makes decision or asks for more information
Decisions usually based on:
- Sound business plan
- Experience in business/ industry
- Sufficient collateral
- Food credit
Lenders want to know 3 things
- How much money do you need?
- How are you going to spend it?
- How are you going to pay it back?
Business Plan should show:
- Start-up costs
- Estimated monthly operating expenses
- Target market
- Projected revenue
- Must plan for debt service
Businesses fail for a lot of reasons, primarily:
- Never should have been started
- Under capitalized – run out of money
For the past 7 years,I’ve helped hundreds of new and small business owners in the preparation of applying for a micro / small business loan. That’s thousands of dollars that potentially fuel your local community. As an experienced business consultant, provide lending guidance and loan packaging services. This specific area of consultation includes assists viable clients with business plans and the applications process.