Website design By BotEap.comApplying for a small business loan can be exciting and stressful at the same time. For the best results and to increase your confidence level, be prepared when you visit the lender you have chosen for your business loan interview. Once you’ve prepared your business plan, start preparing for the loan by writing a loan proposal to present to the lender.

Website design By BotEap.comThe loan proposal should include crucial information and lots of details about you and your business or business idea. You must state who you are, how much money you need and where the money will be spent, how you plan to repay the loan, and what you plan to do if you can’t repay the loan.

Website design By BotEap.comThe following are key elements to include in your loan proposal.

Website design By BotEap.com1. Summary.

Website design By BotEap.comThis should be included in your proposal first, but will be written last. It must contain clear, concise, accurate and attractive information about your business or your business ideas. You should outline how the proposed loan will be used, repaid, and benefit your business. Remember your competition in your loan proposal summary and point out features of your business that are different from your competitors.

Website design By BotEap.com2. Management Profiles.

Website design By BotEap.comThe management profile section of the loan proposal should explain, most importantly, who you are. Get ready to reveal everything about yourself and your experience. Include a current resume as part of the loan proposal, as well as a summary of your skills, qualifications, and other credentials for yourself, as well as all other owners and key members of your management team.

Website design By BotEap.com3. Description of the business.

Website design By BotEap.comIt is not necessary to provide the same information mentioned in your business plan as in your loan proposal. However, you must present a strong description of the business. Include a brief history of the business in your loan proposal and detail current activities. If it is a new business, explain the details of the business that will be developed. Your goal will be to clearly demonstrate that you fully understand your markets, your competitors, and the industry, including any current trends or risks and how you plan to overcome those potential dilemmas. If the loan is for an existing business, include literature that details your products or services, such as current sales sheets, brochures, or catalogs. Include attachments to your loan proposal for this section, such as letters from vendors, clients, or other business references. Show through these letters that you provide excellent customer service and that you pay your creditors.

Website design By BotEap.com4. Business projections.

Website design By BotEap.comCreate at least two years of projected income statements and cash flow statements. Your projections must be clearly stated and, most importantly, they must be realistic in nature. In general, you probably won’t need to submit “worst case” or “best case” unless the lender asks you to write projections that way. However, you should be prepared to answer questions related to what you will do if some of your projections don’t work out as planned. For example, if you anticipate getting a large new contract or customer based on your business loan improvements, and that contract never comes to fruition, it could drastically change your loan proposal projections.

Website design By BotEap.com5. Financial Statements.

Website design By BotEap.comYour loan proposal must include business and personal financial statements. Keep in mind that the lender will fully analyze the history of your financial statements, calculating all the ratios. Be prepared to point out any significant trends you’ve shown in an introductory paragraph.

Website design By BotEap.com6. Purpose of the Loan.

Website design By BotEap.comOne of the most important parts of your loan proposal is a detailed description of how you will use the loan proceeds. Have a good understanding of the type of loan you need, and remember to include loan proceeds in your cash flow projections, as well as interest in your projected income statement.

Website design By BotEap.com7. Payment Plans.

Website design By BotEap.comPayment plans must also be indicated in the financial projections section of the loan proposal, but details of payment plans must be listed separately. Propose the terms you want and prepare to negotiate with the financial institution. The lender will consider a number of factors when reviewing the overall risk of lending you the money. This will understandably affect the payment terms they are willing to offer for your business.

Website design By BotEap.comEspecially if your credit is good, and even if your credit is not so good, remember that in your loan proposal, you are offering the bank a deal that will make them money. Don’t go asking the lender for an “assignment.” Instead, go into the interview with the goal of your loan proposal in mind; that is, focus on how much money you will need and eliminate the idea of ​​going to the meeting wondering how much they are willing to lend. Never go to a meeting asking for a loan, wondering if you will get a loan or not. If this first lender doesn’t approve your loan proposal, trust someone else to.