3 THINGS YOU MUST DO BEFORE APPLYING FOR BUSINESS FINANCE Funding and Business Growth Playbook T: 0330 350 3356 @: hello@GrowingYourNumbers.com www: growingyournumbers.com
You need to justify the loan amount and outline what you are contributing. You’ll need to show that it is sufficient for your needs. Don’t ask for too much, and don’t ask for too little , include a contingency.
Your financial projections must seem reasonable. You need to show precisely how the money will be spent. This is more than outlining the purpose of the loan. You need to explain how you’ve arrived at the figure you’re requesting.
Considerations: Your cashflow and ‘profit and loss’ forecasts are essential. Provide a fully costed breakdown with a contingency built in.
Repayment
How and when will this be repaid.
Lenders must be confident you’ll meet repayment terms or your application will get rejected. Do you have a history of loan repayments? Have you been profitable in the past and are you forecasting to be in the future?
Be prepared to show previous accounts and management reports. Cashflow forecasts will be es sential. Don’t exaggerate forecasts or profit margins.
Considerations: is the source of repayment clear, is the period of the loan acceptable, what other recourse does the lender have if the business fails. Don’t forget the potential risk if your loan is secured.
Insurance
The level of risk to the lender.
What is the nature, type and value of the security you are offering to the lender?
Be prepared for the lender to take a charge over property or ask for personal guarantees. Lenders will always want to remove any level of risk.
Considerations: Do you have an up-to-date valuation of assets?
CAMPARI & ICE
Interest Interest rate, repayment structure, length of the loan. Commission Arrangement fee typically based on % of loan amount.
Extras Examples: Buildings, contents, public liability, key man insurance, health & safety. All the policies needed to ensure you and the lender are adequately protected. Make sure all these costs are identified in your business ’ s plan.
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