Loan Package’s Now
Working with any large bank or small bank, as well as the Small Business Administration (SBA) will require pulling together financial information. A well-prepared business plan will carefully document the amount of the loan you are seeking and the anticipated repayment period you are hoping to find. Obviously, the marketplace and the overall business climate in which you are operating will greatly impact your final loan amount and provisions. Working with a good CPA is the best place to start so that they might best help you approach banks that are looking for your type of business. Commercial lenders, like all of us, want to feel that you are approaching them because of a true desire to do business. If a bank learns however, that you are “shopping a loan” many banks will often pass on the opportunity as they are looking for long-term relationships rather than that solely of a transactional lender. For example, each time you fully approach a bank, they will pull a “credit score” on both the business and the primary owners/guarantors, which creates a permanent record for all subsequent reviewers to see. Thus, it is best to approach only a select group of lenders whose lending model fits that of your business. Writing a business plan is an art that is based on scientific fact. A business owner will want to write his plan so that it tells a story and is an easy to read and follow description of the business. The business plan has to have all of the relevant market and financial information of the business including financial projections as well as analysis of relevant present and future demographics. Although banks almost always require adequate capital as collateral for anything larger than a small signature loan, the last thing the bank wants is for you to fail. Thus, in a sense, you and your bank become financial business partners and they want to know and believe that your loan will be repaid as agreed. No bank desires for a loan to fail in being repaid as they are in the business of making loans and not on foreclosing on property.
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