Thinking of making a bank loan? Do your homework first

Thinking of making a bank loan? Do your homework first!

If you start-up entrepreneurs, to receive a loan through a bank, such as the needle. This is a difficult but not impossible. You just your homework well. This kind of training you need to do, that the chances of getting a bank loan is approved the increase.

Bank's existing business with solid credit ratings, a big bank account, going to go business experience, business plans and ability to repay the loan shows. If you are not one, then you should double your preparations to convince a banker to lend that much needed seed money. If your start-up business, most bankers will be about you and your business to know. Lenders require a lot of reading, and it needs a lot of work all together.

However, many small business owners, often the error is not sufficiently prepared when you go to a bank loan. Not surprisingly, many loan applicants do not even have a slightest idea how or where they are going to repay the money asked. Quite often, they do not even know how much money needs. When asked what they want to borrow money, a lot of people these two common responses: "How much money will I" and "as much as possible." Is it any wonder that lenders say?

Bottom line is that it pays to do your homework before You Ask a loan. Keep in mind that the chances of getting a loan approved increasing degree of risk of lending you money is going down. Reduce your risks and improve your chances to get a loan, you must anticipate the demand for shegekitkhebat creditors. You should get your bank understand your business allows him to approve the loan is easily available. For example, before the end of the loan application, you need to know:

1. Exactly how much money you need? Be as accurate as possible, adding a little additional risks and unforeseen expenses.

2. How is planning money? The dealer tells you the loan for "working capital" and is the fastest way of a loan will be refused. There are only three things you can do with a loan - to buy new assets, pay off old debts or to pay for operating expenses. Be specific as possible.

3. How long it will take you repay the loan? Your cash flow projections will help you formulate a loan repayment schedule. This is where the banker need good qualities of your company and its long-term viability is good.

4. What interest rate can you can? There is no point tying yourself into a loan, which squeeze out your profits and your company bleed dry. This is not your duty to use that can not be covered.

5. What can be used in providing the loan? Credit risk, and the bank must ensure that they are with their money. You have to create your personal guarantee of the loan provision are covered. Your goal is to convince the banker of the cost of your software.

Of course, do not forget to submit in writing all important business plan, explaining in detail your business objectives, expected profit and the next one to three years, the marketing strategy and other relevant information. Make sure that your marketing strategy outlined in detail to give confidence to your sales forecasts.

In addition, your business plan, loan request the support of figures - preferably good. Part of that homework is a collection of financial data, you demonstrate to lenders that you have a good credit risk. In short, this means that building a credit history, which includes the following:

Financial statement listing your assets and liabilities

List all credit cards and their current balance

All outstanding loans, including the original remains of the outstanding amounts, and the monthly payments

Total monthly mortgage payment or rent

Net operating income from your home business, work or other outside sources

Checking and savings account balances

Value of your car (s), including the original cost due to the current balance and monthly payments

The current value of all goods, including real estate, stocks and bonds

To receive a loan through a difficult road. Banks should ensure that they do not take stupid risks with you. Your role in the loan applicant to convince bankers that you and your company's good credit risks.