zeldabelle
Powered by WhyPark.com
Applying for a Business Loan
The process of applying for a business loan is a stringent one as compared to the standard procedures in obtaining a home mortgage loan or a personal loan. This is probably due to the fact that business loans contain a greater risk element as compared to other loans. Therefore, lenders need to exercise greater caution and emphasis when evaluating business loan applications in order to minimize their risk exposure.
With that, lenders evaluate their applicants based on the information that are provided as well as their judgment of the viability and profitability of the business being financed. Thus, business loan applicants will be required to submit a loan proposal along with their applications with the purpose of creating a positive impression upon the lender.
The first element of a loan proposal is an executive summary, providing short descriptions of the type of business and the industry, the purpose and usage of the loan, the proposed repayment conditions as well as the intended loan period. After that, the company information is provided, enriching the reader with the nature of the business, the location of the business, company history, the products or services provided, key differentiation factors of the company or the product, the general growth of the industry, competitive information, growth potential and target customers.
It would help if you could include your company marketing strategy, detailed product information, historical information as well as projected growth plans for the company. Apart from that, if you plan to incorporate product or service extensions in the future, you should provide these descriptions within your loan proposal. If possible, geographical expansion plans will help in the proposal.
The next area that needs to be showcased in the proposal would be the credentials and experience of each member of the management team. Impressive credentials will provide assurance to the lender that the company is managed by individuals who are responsible and capable. This is important as having the wrong people managing the company could be detrimental for the business.
In any loan application, historical records are essential to be used in evaluating the performance of a company. As new companies do not yet have these records, the financial records of the owners will be used as the basis of evaluation. Income tax returns forms are also required by lenders. All of these records provided should be the latest copies less than 90 days old, with the exception of the income tax returns form.
If the loan is applied for an existing company in active operations, company financial statements, including profit and loss accounts, balance sheets and the net worth reconciliation record should be included in the loan proposal. Again, all of this information should also be the latest and less than 90 days old. Additionally, a listing of accounts receivables and other short term and long term debt should be attached.
On the other hand, if the loan application is submitted for a new business, a pro-forma balance sheet and profit and loss account should be provided. Apart from that, a cash flow projection for the upcoming year is drafted to indicate the possibility of recovering the debt. This also means that projected revenue, profits, costs incurred and expenditure should be listed out with definite explanations provided as well as a list of assumptions.
If you possess assets that you wish to use as collateral for your loan, details for this should be provided to the lender as well. It is often common for lenders to request for dual sources of repayment in the event that one source is defaulted. This means that if the business owner defaults on his repayments, the collateral can be sold in order to recover debt.
Finally, other documents normally required for a loan application would be items like the article of incorporation, lease agreements, partnership agreements, license, references, etc. As the list of required documentation, information and attachments differs between lenders, it is best to check with the individual lender on their specific information and documents required to be attached with the loan proposal.
For More Free Resources visit www.oversightsystem.com
MORE ARTICLES:
How I Chose My Work At Home Business
Finding a Work At Home Business can be a difficult thing. If you are like me you have spent countless hours surfing the internet looking at every possible home based opportunity listed. The problem is that there are so many it can become not only cumbersome but also confusing. They all have grandiose claims that you will be making all the money you will ever need in the first week, month, or year. Whatever! It can be so overwhelming that the decision to join one of these programs is often put on hold waiting for that perfect program. On hold means ?time?. And we all know what time is, right? I looked for a program to join for almost a full year, putting off the decision to join over and over again. At first it was because of the excessive s...
Funding New Business/Product Without High Cost Loans
One of the tallest hurdles facing new businesses and entrepreneurs is funding their new venture and the fact remains that securing loans for any new project is next to impossible. Many people are willing to put themselves in debt by maxing out their credit cards, using their savings and borrowing from family and friends to come with enough money to get their project off the ground.
Parature CEO and President to Share Best Practices in Growing Technology Companies at the Third Annual Asian American Business Conference
Duke Chung to speak on the ?Tech CEOs? panel sponsored by Monte Jade.
How a Home Based Business Can Change Your Life For The Better
There's a lot of talk in the media about how the concept of telecommuting and home based business is changing the field of small business. Today, small businesses may be the corner store, a well-known franchise, a network marketing program housed in someone's living room. A small home based business has the potential to completely transform your life, creating a freedom that is rarely found in any other type of business model.
A Code Of Ethics For A Home Business?
We have seen Conrad Black, Martha Stewart, Enron, Tyco, WorldCom, and countless others in the headlines as their career or business is examined to see ?what went wrong?? Newspaper headlines scream about insider trading, companies cooking their books, and other scandals involving business executives at mostly major corporations. Even today, many are questioning the ethics of lenders and investors in the sub-prime market as people are losing their homes to foreclosure and investors are losing their money through direct or indirect involvement. Why was money lent to people who could not afford payments when normal market rates would come into effect? Why would lenders package these loans without identifying the inherent risk of them to the pur...
The Usual Elements of E-Commerce Business Applications
Electronic commerce is the new form of marketing. The Internet has quickly and interestingly taken over the role that was formerly exclusive to conventional marketing techniques. Now, there is no need to be surprised when online businesses and operations proliferate and become massively popular. It is in this regard that e-commerce business applications are highly in-demand and are sought-after in the market.
eBusiness - Small Business Necessity
The rapid growth of the internet commerce in recent years presents established small businesses with a serious dilemma. On the one hand, they can stick with the business model that has worked for them for the last number of years. On the other hand, they can make the shift to serious eBusiness.
Get a desired registered office address for your business for prompt communication
Are you a small business owner in search for a prestigious registered office address?
Sale of Alabanza Web Hosting Business Brings Additional Resources, Executive Focus to National Internet Marketing Firm TruePresence
Alabanza sells web hosting businesses to Navisite; funds will support Truepresence and sister company Baltimore Technology Park, allowing CEO Tom Cunningham to focus on next wave of growth.
Developing A Business Forum: Focus And Function
?Communication--the human connection--is the key to personal and career success.? - Paul J. Meyer
Travel Business Success.com Radio Launches the World?s First Training Podcast Series for Travel and Hospitality Industry Professionals
TravelBusinessSuccess.com Radio has announced the launch of a new training Podcast series dedicated to helping current and future global travel & hospitality professionals succeed.
How Critical Is Customer Loyalty To The Longevity Of Your Business Success?
There is a tendency especially with less experienced business owners or entrepreneurs just getting started, to spend all or most of their time seeking out new business or new customers. Although it is very important to seek new customers on a consistent basis, it is also critical that we develop and maintain a good relationship with our present customer base. This in turn will contribute to the longevity of your business success.
Dr. O'Driscoll to Discuss Harvard Business Review Article at Advanced Learning Technologies Summit
Dr. Tony O'Driscoll will discuss the content of a recent Harvard Business Review article he co-authored and explain how the dynamics of today's business environment call for a new approach for leadership development using advanced learning technologies at the Advanced Learning Technologies Summit on May 13 and 14 Embassy Suites Hotel in Cary, NC.
How Do You Run Your House And A Business?
Alot of people ponder whether a home based business is right for them or not. One reason many people never get started is that they do not believe they can run a home based business and a home and family at the same time. Running a successful home based business means that you should be able to be at home to take care of the things that you normally wouldn?t be able to take care of, while also earning money from your business. There are several potential pitfalls you should be aware of in order to run a successful home based business and home. There are several things that you can do to make this process much easier, and if you do it right, you should easily be able to run your home business as well as your home, with very little hassle.
Mainstream Technologies Names Ms. Kellie Miller New Director of Business Development
Mainstream Technologies Inc. (MTI) a Little Rock, AR based information technology services and consulting firm announced the hiring of Ms. Kellie Miller as its new Director of Business Development. Ms. Miller will be responsible for growing the newly created Information Technology Services Group. This role is responsible for developing new IT Services business for hardware and software platforms, IT consulting, network products and computing hardware management.
