| |
| |
|
Entrepreneurialism Information |
|
|
|
The Deal is in the Details
What Startups Need to Get a Business Loan, Part 2 In part 1 of this article, entitled "Three C's", we looked at the overview of startup business loan requirements from the lender's perspective. We read how cash, good credit and sufficient collateral form a joint partnership to enable a loan request to bond together into a doable deal. Part 2 will convey the borrower's documentation necessities in a more detailed fashion. Bear in mind that the following points are of a "generally complete scope", and that different types of lenders may have additional, similar, or unique conditions to adhere to. All would-be borrowers of startup business capital need to begin to create and/or gather the following information: Business Plan - This is not the same as a full scope "business plan" that you would have professionally prepared to approach a venture capital firm. What your plan needs to document is the type of business, ownership information, legal entity (i.e., sole proprietorship, partnership, corporation, etc.), the origination date of the company, the type of product or service offered, and any organizational or management information that the lender should know about, such as: How many employees will you have, if any, and what their function will be How you intend to get business What your selling terms are (e.g., 2% 10 days, net 30) What facilities are utilized, etc. Use of proceeds - Disclose the loan amount and how the funds will be used (percentage of working capital, of new equipment, of paying off other debts, etc.). Projections - This is a major area. If you can get letters from two or three trades that say they are ready to give you projects once you are funded, it would help tremendously. Also, include income and expense projections for the next three years prepared by you or by an accountant. Generally, lenders will want to see cash flow such that your net income from the business will be at least 1.5 times that of the debt service. Personal Financial Statement - Make sure to list all of your assets and all of your liabilities. List any personal debt owed to banks, finance companies, etc. Personal Tax Returns - Provide copies of the last three years personal tax returns. Make sure to include all pages. Personal Resume - You can create this yourself; there's no need to hire a professional to do this. However, do your very best to make it look professional. Articles of Incorporation - If the business entity is a corporation, provide a copy of the Articles of Incorporation and the borrowing resolution of the company. Partnership Agreement - If the business entity is a partnership, provide a copy of the Partnership Agreement. Business References - Provide three letters of reference, one being from another bank or lender. Ask for testimonials. Do not just list names and phone numbers. Listing of Fixed Assets - List all your fixed assets with their approximate fair market value and their make, model and serial numbers. List their liquidation value as well. Equipment - If any of the proceeds are for new equipment, provide invoices or equipment description(s). List any equipment for the business in your possession, it's age, a copy of title, the original dealer invoice, and the amount of hours on the equipment. Bank Statements - Include bank statement(s) to verify the amount of cash you have to put down on the loan. Credit Report - If you have ordered and received your personal credit report, include it as well. Professional Assistance - List the contact information of your banker, your accountant, your attorney, and your loan broker. With all of this information compiled, you're well on your way to having a nice package to present to a lender. A very wise move would be to contact a professional loan broker to assist you in putting the documentation together into a format that commercial lenders and banks want to see. Brokers are also able to submit your loan request to a few different lenders to provide you with the best possible rates and terms. He or she will also strengthen the request by making certain that all of the appropriate paperwork is gathered and put into it's proper order. Though this procedure may seem daunting, and the documents take a good amount of time to create, there is an additional benefit that is not readily apparent to most borrowers. If, for one reason or another your loan is not approved with the initial attempt, it only takes a few forms prepared by your broker to convert your request into an SBA loan. At that point, you may have a much better chance of funding. Since it's beyond the scope of this article to discuss SBA loans, contact a loan brokering professional for more detailed information. Mark Uptain is the owner of Regent Business Capital, a loan and lease brokerage that works with lenders nationwide to help small and medium-sized businesses get financing. His website The Equipment Leasing Source, offers free equipment leasing information and competitive quotes to businesses throughout the United States.
MORE RESOURCES:
Google News |
|
|
|
RELATED ARTICLES
Ten Traits of Successful Entrepreneurs Successful entrepreneurs have many traits in common. Here are ten of those traits that I consider to be very important. How To Find Focus And Turn Your Talent Into A Thriving Professional Business There are tons of books and articles available to help professionals start up their business, but few that give practical insights on how to nurture your business once it's out of its infancy. At some point, every self-employed professional reaches the same dilemma: how to build a strong brand and grow their business without taking on too many clients, undervaluing their expertise, or sacrificing their lifestyle. Part-Time/In-Home Business - Low Expense and Low Risk As a first time entrepreneur, there are a variety of franchises, dealerships, distributorships, and licensing opportunities available for purchase. Many of these you can start by working part-time from your home. Entrepreneurs Just Get Better With Age Q: I'm thinking about starting a business after I retire next month. I'll be 65. Business Startup Checklist Use this comprehensive checklist to plan each step of your new business and transform your dream of entrepreneurship into reality. These steps may not necessarily be completed in the order listed, however, you can use them as a guideline for completing all of the necessary business startup tasks. Achievements Outweigh Education and Experience Q: When it comes to succeeding in business, which do you think is more important: education or experience? -- Regina M.A: Regina, have you seen the television show, Fear Factor? If you haven't seen it you've probably heard about it. Entrepreneurial Excerpt from a Speech to Small Business Having built a business from a bucket of water and sponge, which started over 25 years ago in a National Franchise chain in 23 states, I feel comfortable discussing entrepreneurship.While building my company in the beginning we learned the value of grass roots marketing, being involved in the community and giving a little back as we grow. Rx for Falling Corporate Profits Once again the squeeze is on as renewed inflation worries slow the economy's growth and many companies resort to believing that cost cutting is the best means to scramble back to profitability in an uncertain economy. The problem with this classic approach is that it sends the clear message to your brightest and best talent that no matter how well they perform, today there is no job security. How Much Risk is Necessary to Grow Your Business? A business owner is thoroughly responsible for their own financial survival and possibly the financial survival of their employees. Business owners, for the most part, seem to be "risk takers", who really don't easily "go with the flow". Top 10 Mistakes Entrepreneurs Make Before They Even Start So you want to start a business. You have an idea. 3 Essential Elements of Operating a Successful Business Have you ever imagined what it would be like to live your dream? A good place to start would be to recognize that there are three elements, and only three elements, that separate success from failure. If you exercise one of the elements, you might just be successful. Top 10 Business Plan Myths of Solo Entrepreneurs Don't let these stop you from having a business plan for success!A recent study of 29,000 business startups noted that 26,000 of them failed. Of those failures, 67% had no written business plan. Defining a R&D Framework for Entrepreneurship and Innovation on Information Product Generation IntroductionKnowledge is the key resource that forms the institutional basis of the post-industrial economy and society. It should be empasized that it is institutions of higher education that give tangible expression to this argument by acting as catalysts for knowledge and research-driven economic growth as well as well-being enhancement. A Dorm Room With A View As a senior in high school, he paid cash for a BMW with money made by selling newspapers. In 1983, as a college freshman, he sold custom-made PCs and parts out of his dorm room?hiding them behind his roommate's shower curtain whenever Mom and Dad visited. The Deal is in the Details What Startups Need to Get a Business Loan, Part 2In part 1 of this article, entitled "Three C's", we looked at the overview of startup business loan requirements from the lender's perspective. We read how cash, good credit and sufficient collateral form a joint partnership to enable a loan request to bond together into a doable deal. Isnt it Time You Started to Fly? I am going to begin this article by sharing a shocking fact.. How Good Is Your Big Idea Q: I want to start my own business. I have tons of business ideas that all sound great to me, but my husband is not so sure. How A Woman Became A Successful Bill Collector In A Mans Industry And How You Can Too! I have worked in the credit industry for over 17 years now. When I first started out, I only knew a very few women in the industry. Go Slow to Go Fast - Why Over 80% Of High Tech Startups Fail And What To Do About It With billions of dollars of venture capital residing down the street on Sand Hill Road, two Stanford professors are attempting to answer a fundamental question "why does it always take longer and cost more to build a hi-tech company than anyone ever expects?" For all the intellect, experience and graduate degrees in the venture capital industry, the sad truth is that 80% of venture capital investments do not pan out. While the reasons for this high attrition rate are too numerous to list here, a simple fact defines every successful investment - the company figures out how to bring in more money than it spends. Think - Dont React How you think, your relationship with yourself is what decides how well you communicate with your customers and relate to your team.The most important relationship you'll ever have is the one you have with yourself so you've got to get that right.
|
| Article List | Index | Site Map |
|
All logos, trademarks and articles on this site are property and copyright of their respective owner(s).
The comments are property of their posters, all the rest is Copyright © 2006 CanadaSEEK.com - All Rights Reserved. |
