Requesting a business loan without adequate preparation sends a clear message to the lender: High Risk! Therefore, it pays to be prepared and organized in your approach for financing.
Securing a loan to start or expand your business is a time-consuming and, in some cases, a frustrating process. Taking the following steps can help expedite the process and ensure your success in obtaining the funding you need:
Prepare a realistic loan request.
Learn what a banker looks for.
Seek advice from a certified public accountant (CPA) who understands the loan application process.
By including DiSabatino, CPA in the relationship between your bank and business, you can greatly ease the frustrations of applying for a loan and increase your chances of success.
The executive summary is usually a letter of introduction at the front of the loan proposal. It should serve as an opportunity for the business to make its case for the bank financing by briefly explaining the history of the business, what it plans to do with the new financing and how it intends to collateralize and pay back the loan.
Perform Cash Budgets and Financial Statements:
We use your data and underlying assumptions to prepare information that your banker can easily read and buy in to. We utilize 3 forms of presentation to assure we have the loan officer's attention:
Numeric financial Data
Narrative explanations of your data to ensure to the bank, we as your CPAs understand the financials.
Owners Personal Financial Statements:
We prepare the required personal financial statements for all guarantors of the loan. Additionally, we make copies of the last 3 years of personal tax returns for the bank as well as identify the collateral being pledged as security for the loan.
We act as a mediator and many times a negotiator between you and the bank. It becomes our job to substantiate your financial needs and position to your banker in person, and to negotiate the best terms for you. The terms extend far beyond that of interest rate and term of loan, but most importantly to the loan covenants! The covenants are what controls you and your company AFTER the loan has been granted.
WARNING! Many times we engage with clients who have had lines of credits closed in the middle of operating a successful business! Yes, the business may be operating and profitable, but if the owner draws too much money out, or buys more equipment, or invests in an company... as defined by the covenant, then the bank may close lines, call notes and other things that can cripple your business. Don't run the risk of loosing the financing you require. Call the firm of DiSabatino, CPA to arrange a no-cost interview.