How to Acquire A Loan Through A Well Written Business Plan

By: TLKleban From the biggest business owner to the smallest, you will need a business plan before opening your business. This plan allows you to review all decisions of management, marketing, personnel and finance in an organized way. Another benefit is that you can project the amount of financing you're going to require during the start-up stages of your business. As you can see, it is an important tool in securing funds and loans. In today’s business and financial environment, a business plan is probably the most crucial document a business owner can have. Without a convincing business plan, no one, including banks and lenders, will seriously consider your business idea. Here are a few ways you can put together a business plan to find funding:

Instructions

Difficulty: Moderately Challenging

1. Research Before you start to put all that hard work into writing a business plan, first do some research into government and other public agency loan standards. Take the Small Business Administration's loan program for example. It is full of the kind of restrictions and requirements you'll find with most loan applications. I recommend using this as a sort of checklist when you are writing your business plan.
2. In your plan, you'll be required to explain your business's assets and liquid funds and how you used them to fund the startup. Any type of property holdings are viewed upon as potential collateral for large loans by most banks. Finally, make note of any available cash you will use to purchase supplies and equipment. Cash is good since it won't affect your credit score or loan potential.
3. In your business plan, you'll also need to provide an detailed list of the current equipment and supplies you own. Your inventory list will include the current value and condition of each item listed.
4. Budget It is pretty important that you write into your plan a basic monthly operating budget. Lenders really don't like giving out their money without first know the costs of running your business, especially during your first year. Expenses such as wages, rent and equipment maintenance all need to accounted for.
5. Develop some profit projections and put those into a chart. The projections want to cover the first 5 to 10 years of your business. In the plan, go over strengths of similar companies to yours, a reasonable amount of monthly customer traffic and then subtract the projected sales from the operational budget. I love using these charts to show lenders that you are serious in your business acumen and are definitely a worthwhile risk for startup funds.
6. How much money do you think you'll need to purchase new equipment and pay salary for any additional employees? All of this needs to be gone over in your business plan. You better have an explanation for each projected move and what will each mean to your business.