If you want to learn how to get a business loan, first you better learn how to perfect your loan application. It dictates the faith of your business by making the difference between getting or not getting financial aid.
Often, this application is the first contact between your company and the lender. So, you have to cast yourself, and your business in a positive light.
This application is your chance to sell him the idea of financing you, and persuade him that you are more than capable of repaying your debt.
A Business “Loan Application” is made of a few important components. Before you apply, carefully construct your application, and ensure it contains these important elements:
Summary: This is the brief overview of your business which describes your company, industry, your competitive advantage. It highlights your business’s requirements, why you seek financial aid, and how much money you need.
Company Overview: This is an important part of the business application, it details the history of your business, current situation, and future strategies to improve.
Management Team: This section offers in-depth details about your management team including their qualification, skills, and experience. It shows the academic accomplishments of each member to help the lender understand what will make your idea successful.
Finance Data: This section gives a brief insight into your financial strength. It showcases financial statements including forecasts for the next few years. The lender will examine given information to learn about your business’s history and ensure you won’t become a liability.
You need to be honest and transparent in every section of your application. Lying to your lender doesn’t direct you towards a positive end. So, be straightforward, and forward the facts to him.
Marketing Strategy: Your marketing plan consists of some crucial details. First, you need to prove that your plan will effectively promote your service or product to the right audience. It mentions a few things about your competition, their weaknesses, and how you will exploit them.
It also gives a brief about your future clients, how you recognized them, and the competitive edge you have over other companies in your market.
Production Plan: This section informs your lender, or bank whether you possess the respective operational capacity to manage the sales figure or not.