Preparing For Lenders

To help you prepare for your presentation to lenders it is important to show the soundness of your business proposal. Take with you pertinent information such as personal and business credit history, personal and business financial statements, personal and business credit history, your business plan, cash flow projections for at least a year and personal guaranties from principal owners of the business.

Meeting with Lender

Other considerations that are important are looking at the current and potential markets for the business you are considering. Look carefully at the strengths and weaknesses of competitors. The Internet can give you a wealth of information on this topic. Of course, it is highly important to choose a line of business that lines up with your experience, skills and interest. Your choice is important because you may be spending most of your work days in that business. Or, if you are thinking about buying an existing business, check it out thoroughly. And, even though an existing business may look attractive, find out why the current owner wants to sell. Look carefully at the contract and financial statements before you sign up.

Another point to consider is if you will be sole owner of the business or if you need a partner. Of course, if you will be the sole owner, you can make all of the decisions; however, if things go wrong, you will have to take it on the chin and move on. If on the other hand you choose to have a partner, the duties and responsibilities for each person must be clearly stated. Decisions on spending, operations, hiring and many other issues will come up along the way; however, the more the decision making process is structured, the less risk you will have of major problems arising and not knowing how to solve those problems.

Meeting with lender

The length of your loan is important because it will determine the total cost of the loan. Talk about loan options with a financial expert. Keep in mind; some loans will charge you an extra fee if you pay off the loan early. So, always find out about any prepayment penalties. Other points to consider are being careful to not apply to the wrong lender. Lenders have different interests, expertise and strategies.

If you apply to one that has never lent money to a business like yours, you may not get the results you want. Talking with a business advisor or several financial advisers will help you find a lender who will fit your business needs. In addition, if your loan is rejected, don’t take it personally. Instead, ask why you were turned down, focus on the weaknesses of your application and then move on to the next lender.

There are certain traits to look for when seeking a reliable small business loan lender such as the lender giving you a high enough lending limit. This is important because as you grow, you will not out-grow the need for your lender. For example, you get into the middle of expanding and you hit a lending limit. This could spell disaster for your business. It is also important to find a business lender instead of an asset-based lender.

It is important that your lender views you as a serious businessman with an operation that he wants to finance, not something that can be easily be taken over by someone else when things go bad. It is important to note that a lender who is qualified and experienced. often view themselves as being a partner who can provide much more than a loan, such as offering management assistance. In addition, he or she will help you find the information you need that will help you achieve your goals. Actually, a good lender will see his own success and future as a lender dependent on your success. That makes for a successful and profitable team!