You have your plan in place and are ready to begin your dream of owning your own small business. Many people in this position immediately seek out their bank for a loan; however there are many other resources available to you as prospective potential investors or lenders. One thing that will remain consistent will be the information that is required of you within your proposal. This is your first step to successfully acquiring a small business loan. What your proposal should consist of is a short history of how your business came into fruition. This also should detail the precise way in which you intend to go about operating this business, what product or service you have the intentions of selling, as well as who your possible competitors are.
It is also very important that you clearly communicate who your potential, generalized customer base will be. Will it be working mothers, single fathers, teenagers, etc? You will then need to submit proof of finances of both you and any other individuals that are considered part owners of at least 20% of the company. If you have any established equity in your business already, you will need to submit a pro-forma balance sheet that details any and all debts against your business. Once the business outline and financial statements are all in alignment, you will need to establish a proposal regarding how you plan to go about repaying the loan. Demonstrate where the finances will be coming from and include specific outlines or timelines indicating how this is possible along with the appropriate cash flow and budget schedules.
Now create a realistic picture of what you intend your positive projected cash flow to consist of within the first year of your business including all foreseeable expenses along with explanations as to how you arrived at these numbers. Suggest any possible collateral that would benefit your cassue. This could be an asset such as any property you own. What lenders will be looking to confirm is that you are proposing a solid, well thought out, researched legitimate business plan that is offering a product or service that is in relative demand. They will also look to be convinced that the staff and management as well as the owners are competent, knowledgeable individuals that are capable of successfully establishing and running your business with the end goal of repaying the money that was borrowed.