Funding for Your Business - How to prepare for the lender

Obtaining funding for your business

When you are planning to launch your own small business, a business loan can be a great idea. Loans to businesses to provide funds for inventory, equipment and other start up costs associated with your new business, such as setting up, acquisition or construction of buildings or the purchase of machinery.

Preparing information for the lender

Before looking for finance, make sure you do your homework. The lender will be impressed, and in many cases actually require you to have a structured business model and plan.

It 's useless to approach the lender with just one blurred outline of what you want. Remember, you're asking them to take a risk, so make sure you have as much relevant information as possible to present to your lender.

You should prepare a detailed business plan showing how they have studied your market, that demand is likely for the product, what are the likely threats are and what measures you have in place to counter these threats. You will also need to provide cash flow forecasts that detail your income and expenses will be provided, and showing how you arrived at those estimates. It 'better to be conservative with your projections of income, but to allow a little' more with projected expenditures.

You need to provide forecasts for 1.2 years and 3. Remember, the better your search, the more comfortable the lender, and the better your chances of getting the necessary funding.

Security for your loan

Loans may be available in both forms secured and unsecured, unsecured loans are much harder to obtain, and in most cases the lender will take security by way of a mortgage. Secured loans will allow you to borrow more, and may be at a cheaper rate of interest of an unsecured loan.

The author, Dave Curran has 30 years of experience in finance and management .......