9 THINGS YOU MUST DO TO MAXIMIZE YOUR CHANCES OF OBTAINING A

9 THINGS YOU MUST DO TO MAXIMIZE YOUR CHANCES OF OBTAINING A
SMALL BUSINESS LOAN
by: neil best
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!

ABOUT THE AUTHOR:
neil best is an accountant with over 15 years experience in
business finance. this article and other useful business finance
INFORMATION SUCH AS MAKING EFFECTIVE BUSINESS PLANS AND SOURCING
and applying for business grants can be found at
http://www.smallbusinessfinancetips.com/small-business-loans.html

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