| You've found an excellent business opportunity, and | | | | balance sheet. |
| are eager to act on it as soon as possible, lest that | | | | You will also need to establish your credibility and skill, |
| opportunity slip. However, you lack the proper funding | | | | as a way of proving that you have the expertise to |
| to get that business of the ground. What can you do? | | | | manage the business opportunity well. Do include your |
| One option is to borrow from friends and relatives; | | | | resume or bio-data, references, and any information on |
| another is to go to a financial institution like a bank and | | | | your business partners. |
| apply for a business loan. The latter requires some | | | | For filing purposes, you should also give your personal |
| preparation; after all, you will have to convince the loan | | | | identification and social insurance number, a list of your |
| officer that you have a good business opportunity and | | | | bank accounts, your personal net worth statement |
| have the background and qualifications to make it | | | | (with a list of assets and liabilities), and credit |
| work. | | | | references. This will help the bank evaluate your credit |
| Most loan officers will ask for details about the | | | | history, and determine how high the "risk' the bank will |
| business opportunity, and how you plan to use the | | | | take in lending you the money. |
| money to bring that idea to fruition. It's important that | | | | If you are Expanding an Existing Business |
| you give solid facts to back up your plans. You will | | | | If the company is already in existence, and you are |
| present all of this in your business plan. | | | | getting a loan to expand it, you will also have to furnish |
| If You are Setting up a New Business | | | | a copy of the company's bank accounts and credit |
| The business plan is when you take any business | | | | references, a complete set of financial statements |
| opportunity, and give it form and structure. It starts with | | | | from the last three years, current year to date financial |
| an executive summary, which must state the amount | | | | statements, and accounts payables and receivables. |
| you need to borrow, the kind of loan you plan to take, | | | | You will also need to supply the loan officer with a |
| and a short explanation of the business opportunity | | | | company history, a background of the existing |
| you want to pursue. | | | | products and services you provide, and statistics that |
| Aside from the Executive summary, you will also have | | | | prove that there is a viable market for expansion. You |
| to present some documents to support your request | | | | may have to give industry statistics or research that |
| for a business loan. This includes, first and foremost, | | | | support that the business opportunity exists and that |
| your financial projections. The loan officer needs to be | | | | your existing resources cannot sustain the possible |
| convinced that the business opportunity has a good | | | | growth. You may also have to submit a plan of how |
| chance of making a good profit, which in turn will | | | | you will allocate the money and the projected increase |
| enable you to pay the bank back. Documents include | | | | in revenues. |
| your income statement, cash flow projections, and | | | | |