With interest rates at historical lows for the past few years and fierce competition amongst lenders, securing finance has never been easier.... if you know how.
Once you've chosen your source of finance, you'll need to convince the lender that your business is a low risk for them. To do this you must be able to explain your business model and represent it's strengths professionally in the form of a business plan.
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The Presentation
You should provide a background of both your business and your personal experience and qualifications. Then give your view on the direction of your business and the industry you operate in. Be prepared to discuss the following points:
- The level of funding you require and how long you will need it for.
- What additional revenue will be generated by the loan.
- What risks are there and how you will mitigate them.
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Documentation
You will need to provide current financial statements. If they are older than 3 months an interim set of financials signed off by a CPA can be helpful. Reports from a well recognised accounting system such as MYOB and prepared by a professional bookkeeper will give the lender greater confidence in the accuracy of the accounts.
You will also need to present a business plan which outlines the core aspects of your business and its future plans. -
Business Plan
Provide a brief overview of you business, including: name, address, owners, nature, history, structure, related companies, number of employees and current business assets.
-Profile the business owners and management, including their education, experience skills and professional achievements. Outlining your business knowledge base and industry experience will help establish your business as a low risk customer.
-Discuss your customers and how your product or service meets a market need and your companies "points of difference."
-Outline details of how you will use the funding, how much you need and how long you will need it for.
-You should use the past 3 years as a template to project the next 3 years goals for sales, income, business operations, marketing strategies and cashflow projections. Your projections should obviously show that you will comfortably repay the loan.
-Detail any collateral you are willing to pledge as security
-Identify the risks- lenders like to know you have considered all possible risks and have contingency plans in place to deal with them.
-Provide copies of any printed brochures or articles that may enhance your companies profile and perceived professionalism.
Be confident, prepared and share your enthusiasm about the future of your business with the lender. Your attitude, approach and commitment to the long-term business goals of your company will help establish you as a sought after customer.
