If you have tried to obtain a bank loan for your business, lately, they know this is not slam-dunk. The promos of the SBA loans and loans for minorities or businesses owned by women sounds great, but when the nose to nose with a banker who is another story.
Some of the reasons that make it seem so difficult are that many officials believe that the loans are loans that instead of your money in the bank. They take almost personal responsibility for maximizing reimbursement.
Another is that they are particularly suspicious of new businesses. Since 4 of every 5 or 80% fail within the first three years, many lenders require a three-year history of the business.
Finally, all banks and the merger of acquisitions that have taken place the decision making process has now moved off-site of the local branch. Adding all these reasons, it is better to be prepared for Razzle-dazzle andalusia banker.
Here are some tips to make loans more attractive to the bank. First, start with a presentation in two parts. Initially submit a brief summary of your loan application. In this overview include:
• Excerpts of his business plan about your business concept, management team and financial projections.
• Overview of the credit history of the directors of your company.
• Inform the lender answers to key questions of how much are needed, how to use and how you will pay again?
This should be a period of two to three pages and can be viewed as a mutual qualifier. Determine whether the bank is interested in borrowing the funds before you turn the wheels for hours before the loan officer. You can finish the paper with his phone number so the bank can call back for an appointment or discussion.
If the agent has baffled and have sufficient credit to get an appointment to meet with him, then it is time to prepare the "big fish". The ammunition you’ll come prepared with a duration of three years personal tax returns for all directors of the company and its existing business. Include credit reports on all principals, and an impressive full business plan, and information assurance and capitalization.
This sounds like a lot of information and will require great effort, but that is why ownership of enterprises is not for everyone.
Besides being prepared with all the papers to be prepared for any off the wall questions the lender may throw at you. Take time to think about their origin and a 30 second commercial about what you plan to do and how they benefit and the business world.
Be prepared to explain credit blemishes that appear on credit reports before the banker has the opportunity to worry about them. Make sure you are capable of "cash flow" understanding and knowledge, without which any business is doomed. Its plot more realistic estimated cash flow and bank account balance. Make sure that the bank balance never goes negative, and a nice touch to show the loan repayment as a separate line. This shows that the banker to understand the priorities.
Guarantee may be needed to satisfy the anxiety of the lender for repayment of the loan and unfortunately most small businesses have very few assets to satisfy this need. Many entrepreneurs are forced to compromise with their personal property such as your home to dispel the bank. This may seem scary, and is, unless you are really sure of your success.
Sounds like a daunting task, but with some preparation and determination can do. Not as easy as all the ads you’ve heard, and only the fact that you are starting a "woman owned" company would not cut ice with a banker, but all of life is a game of chance is not what?
After all, that’s why you’re an entrepreneur rather than a corporate lackey, no? Go for the GOLD!
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