PREPARING FOR BUSINESS LOANS
Getting approved for a startup business loan during these tough economic times can be tough. You can increase your capabilities as a candidate for a loan by doing your due diligence for preparation for your preliminary meeting with a potential lender.
One of the most important first steps when getting
ready is to have all the documents ready a lender may ask for. These
documents may include: tax returns and past financial statements, a
copies of any current loans and their respective payment schedules
(if you operate an established business) and a descriptive business
plan. There are also
to follow when getting ready to start any new business.
-Executive summary - A thorough introductory
statement summarizing the key points of your plan; a display into
every aspect of your business.
- Company profile - A briefing of the industry
your company is involved in; detailing the essentials that will make
your business more noticeable and better than the competition.
- Explore loan options. Determine what options will best satisfy your needs and be ready to talk about these options when you meet with your potential lender. Are you going to be looking for a secured or an unsecured loan and what sort of terms can your business afford?
- Plan ahead. Foresee the questions a lender may ask and be prepared to answer honestly. Lenders' final decisions are going to be based on facts. Never be unrealistic when answering questions and providing forecasts. Lenders are going to recognize your realistic outlook. It is going to be a good idea to get all of your documents organized before the meeting so that you can pull specific papers at request. This will show that you are prepared and will also exemplify your careful attention to detail.
- Invest in your own business. In the midst of the constricted credit market, managing risk has become the most important factor for lenders. If possible, provide a substantial amount of money or collateral towards your business. Your eagerness to invest in your success will likely reveal added faith in your plan. Learn more about re-investing into your business.
- Being prepared before your meeting with your lender is crucial. The commitment and time you put in before-hand may help improve your appeal as a stable loan candidate in this aggressive market.