Bank loan applications can be almost as long and complete as a full-fledged business plan.
Bank loan applications can be almost as long and complete as a full-fledged business plan.Plans and loan applications aren’t interchangeable, however.
The Bank Business Plan is about 25-30 pages in length, including color charts and graphs, and consists of the following components: Every plan includes our suite of professional services: You’ll receive a document written in Microsoft Word, financials custom-built in Microsoft Excel, and a finished plan laid out in professional graphic programs by skilled designers.
Power Point Presentation (Optional): A Wise Business Power Point Presentation helps direct investor attention to the points you most want to emphasize while offering an outline to streamline your presentation to potential funding sources.
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.
They don’t want control—at least beyond the control exerted in the covenants of a loan document. Bankers make loans, not investments, and as a general rule, they don’t want to wind up owning your company. You take out a loan and pay it back, perhaps in installments consisting of principal and interest, perhaps in payments of interest only, followed by a balloon payment of the principal.
One of the nice things about debt financing is that the entrepreneur doesn’t have to give up ownership of his company to get it.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.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.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.