How To Apply For a Business Loan

Worried about how to apply for a business loan? Although it may seem like a daunting task at first, it can be made less so by careful preparation. When applying for a business loan, you must prepare a written loan proposal. Make your best presentation in the initial business loan proposal and application; you may not get a second opportunity.

Always begin your proposal with a covering letter. Clearly and briefly explain who you are, your business background, nature of your business, the amount and purpose of your loan request, your requested terms of repayment, how the funds will benefit your business, and how you will repay the business loan. Keep this cover page simple and direct.

When writing your proposal, don't assume the reader is familiar with your industry or your individual business. Always include industry-specific details so your reader can understand how your particular business is run and what industry trends affect it.

Provide a written description of your business, including the following information:

Type of organization, Date of information, Location, Product or service, Brief history, Proposed Future Operation, Competition, customers, Suppliers

Management Experience: Resumes of each owner and key management members.

Loan Repayment: Provide a brief written statement indicating how the loan will be repaid, including repayment sources and time requirements. Cash-flow schedules, budgets, and other appropriate information should support this statement.

Existing Business: Provide financial statements for at least the last three years, plus a current dated statement (no older than 90 days) including balance sheets, profit & loss statements, and a reconciliation of net worth. Aging of accounts payable and accounts receivables should be included.

Proposed Business: Provide a pro-forma balance sheet reflecting sources and uses of both equity and borrowed funds.

Projections: Provide a projection of future operations for at least one year or until positive cash flow can be shown. Include earnings, expenses, and reasoning for these estimates. The projections should be in profit & loss format. Explain assumptions used if different from trend or industry standards and support your projected figures with clear, documented explanations.

Collateral: Provide a list assets to be held as collateral. Few financial institutions will provide non-collateral based business loans. All business loans should have at least two identifiable sources of repayment. The first source is ordinarily cash flow generated from profitable operations of the business. The second source is usually collateral pledged to secure the business loan.

Depending on your particular circumstance you may need to provide one or more of the following documents:

Lease, Franchise Agreement, Purchase Agreement, Letters of Intent, Articles of Incorporation, Plans, Copies of Licenses, Letters of Reference, Contracts or Partnership Agreement.

You may freely reprint this article provided the author's biography remains intact:

John Mussi is the founder of Direct Online Loans who help UK homeowners find the best available loans via the http://www.directonlineloans.co.uk website.

---

Guide to Personal Loans

Here is a useful guide to Personal loans. What is... Read More

Student Loans Are The Life Preserver Of The Education System

A loan is the reason many students are able to... Read More

Guide to Loan Terms

Listed below is a guide to loan terms. It is... Read More

What is a Homeowner Loan?

A Homeowner Loan is a way of using the equity... Read More

The Best Day of The Week For Payday Loans

Whether your payday arrives every Friday or every other Friday,... Read More

Payday Loans - Bridging The Void Between Paychecks

Emergency - the word is written everywhere in red and... Read More

What Is A Payday Loan?

A Payday loan is a small, short-term, high-rate loan. It... Read More

Finance Your Home Business: Six Ways Under Your Nose

There are lots of ways to get additional capital to... Read More

Where to Get Your Military Signature Loan

Military signature loans are easy to come by. When looking... Read More

Debt Consolidation ? Watch out for Payday Loans

Most any large city has a number of small shops... Read More

Why Choose a Bad Credit Personal Loan?

Listed below are some of the reasons for choosing a... Read More

A Guide to Finding an Adverse Credit Homeowner Loan

If you're searching for an adverse credit homeowner loan, you... Read More

User Guide to Payday Loan Terminologies

Are you approaching towards a payday loan cash advance? Is... Read More

PayDay & Cash Advance Loans Online ? How Do Online Payday Loans Work?

How online payday loans or cash advance loans work? Online... Read More

What is a Tenant Loan?

Ever wondered what is a Tenant Loan? A tenant loan... Read More

What is a Bridging Loan?

A bridging loan as the name implies is a loan... Read More

Let Us Uncover The Mystery Of Secured Loans

Okay, so one day you wake up and realize that... Read More

No Credit Car Loans - Even With No Credit History, You Can Still Get Approved

Even it you have no credit history, you can still... Read More

No Credit Check Personal Loans - If You Need Fast Cash, A PayDay Loan Online Is a Very Quick Process

Online payday loans can get you fast cash through a... Read More

A Guide to Looking for Cheap Online Loans

Cheap online loans may seem hard to come by, but... Read More

All About Bad Credit Secured Loans

Bad credit secured loans are a relatively recent addition to... Read More

Try Unsecured Loans! If The Word Secured Doesn?t Fit Your Financial Statement

Big financial goals, no security to supply - it is... Read More

Zero Zero Financing on Automobiles in Retrospect

Some say that the automobile industry saved the economy during... Read More

How To Reduce Your Payments

Are you paying out too much every month for your... Read More

Guide to Unsecured Loans

Outlined below is a guide to unsecured loans. It will... Read More

Beware of some Get Cash Now Vendors

Some weeks it feels like you're living hand to mouth.... Read More

Best Car Loan Rates - Tips To Getting a Low Auto Loan Rate Online

Online car loan shopping practically guarantees that you are getting... Read More

A College Loan Will Finance Your Education!

A college loan has given people all over the United... Read More

Be Careful With Loans For Bad Credit

If you're saddled with debt or find yourself in an... Read More

Guide to Personal Secured Loans

Here is a useful guide to personal secured loans. A... Read More

Payday Loans - Ways to Keep Your Costs Low

Payday loans offer a fast and easy solution to financial... Read More

Hidden Bank Loan Charges That Would Make a Pick-Pocket Envious

There can be more to a bank business loan than... Read More

A Consumers Guide to Getting a Bad Credit Loan

Here is a useful guide to getting a bad credit... Read More