Getting
a bank loan for your business may be more difficult than usual in today's
economy. However, if you give your bank a thorough, organized, and
well-supported loan proposal, you'll increase your chances of getting the money
your business needs.
* Apply early. Applying early shows that you're planning, not reacting. Also, if you wait until the last minute, you're likely to leave out necessary information.
* Apply early. Applying early shows that you're planning, not reacting. Also, if you wait until the last minute, you're likely to leave out necessary information.
* Prepare
a loan proposal. Many small businesses, especially first-time borrowers, fail
to prepare a formal loan proposal. This is a mistake. The loan proposal,
together with cover letter and supporting documentation, gives you a chance to
explain your request clearly and thoroughly.
* Give
the bank what it needs to know. Be prepared to present detailed, well-supported
answers to the following questions: How much money do you need? For what
purpose? How long do you need it? How will you repay it? What collateral are
you willing to put up, and how much is it worth?
* Include
all essential documents. With respect to your business, you'll probably need at
least the last three annual financial reports and tax returns, the most recent
interim report, and a recent aging schedule for accounts receivable. You may
also have to provide personal information, including a current personal
financial statement and your last three tax returns. For business equipment and
real estate, you may have to provide a recent appraisal.
* Give
bad news as well as good. Your personal character is the most important
nonfinancial part of your loan proposal. Increase your credibility by revealing
your financial skeletons, if any, ahead of time.
If you
do your homework and prepare thoroughly, you're more likely to obtain the money
you need. Contact us at (518) 798-3330 for assistance in preparing your loan proposal.
