You’re feeling good about the opportunity ahead of you and you decide, yes, it’s time to seek funding for my venture. You contact your preferred lender, have a nice conversation, and they ask you to complete their loan application. You’re excited and eager to get started, until you open it. Within seconds, you’re horrified! Why do they need all this information, and why do you not even understand what some of the things are that they’re asking for?
Most people feel intimidated when they first look through and see everything a lender is asking for. I thought it might be helpful to you to walk you through why we need this information.
1) Tell me about yourself.
As a lender I want to know about you, the person applying for the loan. I’ll ask about your training, knowledge and work experience. I’ll also want to know your personal financial information including things like your household income and expenses, the assets you own and the liabilities you have. I want to understand whether or not you’ll be depending on this business to cover your household expenses and whether or not you have backup funds to help cover any unexpected expenses that might come up.
2) Tell me about your business.
As a lender I will want to know all about your business. What exactly do you want to do, who are your competitors, what market are you targeting, and where are you planning to operate? A business plan is helpful. I’ll want to see your cash flow projections including the assumptions you made when creating it. If you’re an existing business, I’ll ask for some historical financial information. I am trying to assess viability and sustainability as well as the businesses ability to pay a loan payment.
3) How much do you need and why?
I’ll need to know how much money you’re requesting as well as what you’re planning to use it for. Are you buying any assets I can use for security? Do you have an existing loan with another lender? How much are you contributing financially to the project? What can you offer as security for the loan?
While it may seem like a lot of information, it’s all needed to assess your request.
My team and I will be here to help you every step of the way if you choose to apply for your loan at the Business Resource Centre of Essex County.