How to Get a Loan for a Business

To obtain a loan for starting a new business or improving an existing business, a Financial Plan and Marketing Strategy Report is needed to present to the bank. The FPMS Report may be written by the person seeking the loan, or a professional writer may be hired to draft or review it. A well-written FPMS Report will aid the applicant in her attempt to get a business loan. What sections are needed in the FPMS Report?

Instructions

Difficulty: Moderate

1. Imagine walking into a bank and handing over a few sheets of stapled papers to get a loan. Getting a loan is easy, if you are prepared to type a little and print. First, type the 8-line Header (your business name, the words "Financial Plan and Marketing Strategy Report," your address, phone, fax, email and website).
2. Write the Introduction letting the bank know what you are seeking. For a new business, it may read: "(Applicant) is seeking a term-rate loan for start-up expenses and a one-year credit line for operating expenses to establish (business) in (location). (Applicant) is open an initial 6-month credit line to allow the lender the opportunity to evaluate the progress of the business; (applicant) anticipates meeting all operational expenses within six months of establishing (business). (Applicant) is open to negotiations with the lender to secure the start-up term-rate loan."
3. Type the "Mission Statement" section. This, of course, will simply include the business' mission statement.
4. Devise a section called, "Keys to Success." List three or four ways your business will outperform its competitors.
5. Create a "Management Summary" section. Highlight achievements in the applicant's work experience.
6. Draft a section called, "Product Description," if it is applicable. Perhaps "Service Description" would be more applicable to the business. A product description may read, "(Business) seeks to manufacture (product), hereafter referred to as (name of product). Provisional patent information is as follows..."
7. Add a "Marketing Plan" section. List the objectives, followed by strategies and tactics.
8. Have a "Sample Customers/Financial Plan" section. The Financial Plan section should detail income vs. expenses for a 12-month period. Include the following sentence: "This FPMS Report includes a conservative estimate of income for the first year."
9. Complete the report with a "Financing" section. It should read something like this: "(Applicant) is seeking a term-rate loan of $26,900 for the start-up expenses for (business) and a one-year credit-line of $69,240 for first-year operating expenses. (Applicant) is open to... Second-year income is estimated at a minimum of $129,600. Attached are income vs. expense statements, an itemized listing of fixed assets..."
10. Walk into your bank and hand them the report. If it is not accepted, ask if there is room for further negotiation or go to another bank.

Tips & Warnings

• Have your Financial Plan and Marketing Strategy reviewed by a reputable agency, such as business assistance center in your locality.