Sunday, March 27, 2011

Bank Loan- What you need to do to get it

Most entrepreneurs know all too well the challenges of getting a bank loan. It can be a harrowing and frustrating experience convincing bankers to give you credit. The financial community and especially banks do not take start ups and small businesses seriously. They are not willing to risk their money for a proposed business unless they can clearly see how they will get their money back. To increase the odds of getting a bank loan for your business fulfill the below requirements:
 Create a business plan. This business plan is meant for a third party to understand hence sell your vision, passion and commitment. In the business plan, include;
·         Where you have come from
·         Where you are now, what challenges you are facing that need  support
·         Where you intend to be
·         How you are going to get there
·         Supporting information (which should be current)
·         Do not pack the plan make it simple to understand
Conduct a SWOT Analysis which will clearly demonstrate that you understand the environment that you are operating in. Spell out your business’s internal strength which could be management experience, competent staff or brand name. Highlight the opportunities that exist for your business which you can and will pursue. State whatever weakness you have and the threat that your business faces and how you will address them.
Tell the banker of your past successes and failures and training plan to fill in the skill gaps.
The bank is also interested in knowing the management’s competencies therefore attach CV’s (curriculum vitae) of yourself and your key staff.
Lastly show the bank that you have succession plan.
Remember the old saying,”Where there is a will there is a way”? Prepare your business plan thoroughly include all the above, go ahead and apply.
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