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Borrowing Money - Banker Key Questions

Written by: Manage Your Business

Article Overview: The key questions the banker will be seeking to answer are as follows:

Borrowing Money - Banker Key Questions

The key questions the banker will be seeking to answer are as follows:

* Can the business repay the loan? (is cash flow greater than debt service?)
* Can you repay the loan if the business fails? (is collateral sufficient to repay the loan?)
* Does the business collect its bills?
* Does the business control its inventory?
* Does the business pay its bills?
* Are the officers committed to the business?
* Does the business have a profitable operating history?
* Does the business match its sources and uses of funds?
* Are sales growing?
* Does the business control expenses?
* Are profits increasing as a percentage of sales?
* Is there any discretionary cash flow?
* What is the future of the industry?
* Who is your competition and what are their strengths and weaknesses?

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Re: Advice Wanted - I keep saying this but I have to say it again. I dont like partnerships. Any family money should be a know donation to you before hand. Borrowing from family is one of the worst most stressful things you can do. I would have to know more to give any real advice but be careful with partners. If you do decide to take on a partner make sure you get a good business attorney.
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QuickBooks vs. Microsoft Money vs....? - I have always used Microsoft Money to run my business - accounting, invoicing, etc. It came with my computer when I got it and integrated well with my online banking system so everything is a breeze. It only takes 30-60 minutes every quarter to do the bookkeeping (keep in mind that I have a very simple business - no inventory, very little invoicing, I do all my payments by credit card, etc). Is QuickBooks or Money the best accounting tool for small business owners? Or is there something even better?
Re: Advice Wanted - [quote="tobuso":3urnktbh]I keep saying this but I have to say it again. I dont like partnerships. Any family money should be a know donation to you before hand. Borrowing from family is one of the worst most stressful things you can do. I would have to know more to give any real advice but be careful with partners. If you do decide to take on a partner make sure you get a good business attorney.[/quote:3urnktbh] It sounds like you've been burned in the past by partnerships Philip!


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