9 Things You Must Do To Maximise The Chances Of Obtaining A Small Business Loan

9 Things You Must Do To Maximize Your Chances Of
Obtaining A Small Business Loan...



by: E.SAUNDERS



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!)



Good luck!