When
you apply for a business loan, your request must meet certain
basic requirements.
Your
banker needs to have:
|
|
|
A
written request for a specific amount of money.
|
|
|
A
detailed explanation of the use of the funds.
|
|
|
A
projection of how and when you will repay the loan.
|
|
|
A
list of the collateral you are offering as security for the
loan. |
In
addition to these essentials, the banker will want to know what
will happen in the event of your disability or death; that is,
do you carry disability, life, and general liability insurance?
The
banker also wants to know:
|
| 1. |
The
financial history of your company in the form of company balance
sheets and profit and loss statements for at least the past
three years.
|
| 2. |
A
realistic projection of profits and a twelve-month (month-by-month)
cash flow projection. This spreadsheet should show the specific
month that cash will be received from various sources and
the month that specific disbursements need to be made.
|
| 3. |
A
narrative relating your personal business experience.
|
| 4. |
The
company "game plan" telling where the company will
be several years hence in terms of size, types of products
or services, number of employees, locations, etc., to give
the banker some insight into your long-range planning.
|
Put
yourself in the banker's shoes and see what questions you would
want answered if someone asked you to risk your capital. If you
have not previously assembled a loan request in this manner, engage
professional assistance.
|
|
| If
we can assist you in assembling a loan request
or in your other business concerns, please
call our office, or send your questions to us
via e-mail. |
|
|
