If your own capacity for taking on additional debt is shaky, a co-signer (who's essentially lending you their creditworthiness) may make the difference.4. More than ever before, bankers are taking a closer look at the marketing plans embedded in business plans.
Strong competitors, price wars, me-too products, the fickle habits of the buying public and other market-related risks must be addressed.
In this edited excerpt, the authors discuss the ABCs of getting a bank loan for your business.
Many of the most successful businesses are financed by banks, which can provide small to moderate amounts of capital at market costs.
A strong, carefully thought out business plan showcases your commitment to your concept and demonstrates your willingness to put in the time and effort needed to provide your business with a firm foundation.
From compelling, in-depth market research to detailed financials, a Wise Business Bank Business Plan includes everything necessary to support your bid for bank funding.It may consist of machinery, equipment, inventory or, all too often, the equity you own in your home. They have no desire to own second-hand equipment or your house.Experience has taught them that entrepreneurs who have their own assets at risk are more likely to stick to a business than those who have none of their own assets at risk.3. They provide an added layer of protection for lenders.Each concise, visually appealing business plan presentation for investors is carefully written and designed to perfectly support your investor business plan., the staff of Entrepreneur Media offer an in-depth understanding of what’s essential to any business plan, what’s appropriate for your venture and what it takes to ensure success.Bankers can usually be counted on to want minimal, if any, input into how the business is run.Get behind on the payment schedule, however, and you’re likely to find a host of covenants buried in your loan documentation.Loan covenants may require you to do all sorts of things, from setting a minimum amount of working capital you must maintain to prohibiting you from making certain purchases or signing leases without bank approval.Be sure to have your accountant, financial advisor or attorney review your loan documents and spell out everything for you very carefully before you sign.On the other hand, a banker is likely to be quite interested in seeing a contingency plan that will let you pay back the loan, even in the event of a worst-case scenario.The five things a banker will look for you to address are:1. One of the most convincing things you can show a banker is the existence of a strong, well-documented flow of cash that will be more than adequate to repay a loan’s scheduled principal and interest.