Nine things to do to enhance chances of
getting business loan
To get approval for your
small business loan application, you must be able to meet the lending
criteria set down. Some organisations are more risk averse than others,
and will therefore have more stringent criteria.
To vastly increase your chances of a successful funding application, you
will need to present the following information:
1. The reason for the loan. The lender will be looking for something that
fits within the normal range and expertise of your business. The amount
may cover a number of items, so you will need to cover each.
2. The amount required, and the repayment term of the small business loan
you want. (e.g. $10,000 term 5 years, payable quarterly).
3. Details of how you will repay the amount borrowed. For example, “From
the increase in profits of reduced running costs of the Whizzbang Go4It”
4. Details of security you will be able to offer to the lender. This will
act as reassurance for the lender. If you’re not prepared to put up some
aspect of security, then why should they?
5. You will need to include your business plan which will serve to answer
essential questions relating to management capabilities, information about
the market you operate in. What kind of business you are in etc.
6. 3 Years financial statements. You will need to present quality
financial information from your accounting software, preferably signed off
by your accountant or tax advisor.
7. Latest Set of Management accounts. Again produced from your accounting
software.
8. Accounts receivables (debtors) and payables (creditors) ageing reports.
9. Principals financial statements. – Particularly required if some form
of security is necessary.
If you are a new company, the emphasis is going to be on your business
plan , and the security (also called collateral) you or your business can
provide against the loan.
You must take the time to practice presenting your case to the bank or
lender to iron out any glitches. Practice on your colleagues and family
(you never know, they might be so impressed, they'll invest or lend!). It
may help to role play the lender and come up with as many pointy questions
as possible. The more time you take the better your chances will be. (But
remember, don’t fall into the analysis paralysis trap!)
