Business Finance Solutions

Mark Van Neem asked:

There are conventional business loans available, however, you need to do your research and use it to write a business plan before approaching a lender. No one will loan you money strictly because you have decided to start a business. Lenders need to know that you have carefully planned your business activity.

The loan officer will analyze your plan and decide if you have good chances to generate the short and long terms profit necessary to pay the money back. A good business plan is essential because a business that does not work on paper is most likely not going to work in reality.

If you want to qualify for a business loan, you will need a sound business plan with two or three years cash flow projections. You also need good credit history, and sufficient financial resources for a down payment.

Let’s take a look at what a business plan is.

A business plan is a document which describes the business you intend to start and how it will become profitable. A business plan usually starts with a mission statement outlining the goals of the business and goes on to demonstrate how the business owner will achieve those goals. It also has to include a detailed description of the marketing strategies you plan to use.

A thorough business plan should also contain a formal break even analysis, the profit and loss projection, and a cash flow analysis designed to demonstrate that if the business grows as expected, it will generate income.

It is definitely a good idea to write a business plan even if you are not going to borrow money.

A business plan is not just an instrument designed to attract potential investors or to convince lenders of your reliability. A solid business plan it is a real plan which should prove to yourself, the potential owner, the financial viability and soundness of your business concept.

The very process of creating a business plan will force you to carefully weight the key issues before you take any action toward starting the business, such as what your start-up costs are going to be, how you will raise the necessary funds, which marketing strategies are more appropriate, all this will help you figure out if you have a winner.

At this point if you are applying for a business loan it would be desireable to find somebody who can produce a professional presentation, that would not make your business plan any more successful but would demonstrate to the bank loan officer how serious you are about your new business.

The structure, content, and format of your business plan will depend on your business idea and your intended audience. To maximize your chances to obtain your business loan from a bank, your business plan will have to present solid financial data and market research in a professional, polished package.

Mark Van Neem
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