Financial Ability to Repay One of the most obvious things that a lender will be interested in is the ability of you to financially repay the loan that you are requesting. Before you present your loan request, create a current list of assets, income and liabilities. Create this list for both your personal finances and your business finances; the lender will want to see both. Include your business’ assets as well to show the progress that your business has made if you are requesting an expansion loan. Lenders will be impressed with growth. Lenders also like to see assets that will protect them in the event of a defaulted loan and a Borrower that is organised and proactive in preparing this information will be impressive.
Expertise A lender is often not just betting on your financial ability to repay a loan, but on you yourself. Prepare an updated resume of your business experience, successes and business skills to support your business case to the lender that you are a good risk. Your personal presentation is a sale. Sell yourself as a reputable, honest, experienced and valuable investment for them to consider loaning money to.
Business Plan Prepare an updated and detailed business plan showing where your business came from, where it is currently and where is headed. Include accountant prepared and audited cash statements when possible to the lender, the show detailed and realistic cash flow projections. Lenders are going to want to see progress and momentum towards a positive business future. Include in your proposal the amount of the loan that you are requesting, what the money will be used for and the expected business success for repayment that will occur as an end result.
One of the most often overlooked factors for business owners is insurance. Lenders want insurance for loans in the event of a default. Life insurance, disability insurance, business insurance and plan to protect business partners from each other are all important factors to have prepared to show a potential lender.
Strong financial skills are essential to possess and maintain as a business owner. To read more about how to prepare for a lender presentation, read my article, “Business Loans- What a Lender is Looking For”.
How to get your Bank Manager to sanction your loan application - To learn more about this author, visit Mark Gwilliam's Website.
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Mark Gwilliam
(Visit Mark's Website)
Mark Gwilliam, FCCA, uses his
international experience to coach small
business owners on how to run successful
businesses. He combines his natural
enthusiasm for sharing his knowledge with
his proven ability to provide practical
down-to-earth solutions for his clients.
He has written several books and owns
several companies which offer small
business owners integrated business
solutions. He writes several business
articles in his weekly newsletters “The
Bizness” and “Successful Marketing
Strategies”. To read these and to have
access to more tools and resources to
turbo charge your business, visit his
sites at www.thema
rketingdude.com and www.mark-gwi
lliam.com
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