1. Credit record.
Do all in your power to protect your credit record. Communicate regularly with your bank, and service your accounts responsibly.
2. Test profitability.
Test the economics of your product or service. Ensure that it will be able to deliver profitability and that the gross profit percent is in line with the industry.
3. Check your personal balance sheet.
Determine your net worth and your annual cash flow needs. A bank will want security so the more detailed your personal balance sheet, the better. Always have substantiating documents available.
4. See the bank manager.
Know what information the bank will require and pay the bank manager a visit before submitting your loan application. Ask him what information the bank will need to evaluate the loan.
5. Do financial forecasts.
Develop realistic financial forecasts for income statements, cash flow and balance sheets for two to three years. Forecast monthly for the first year.
6. Have a great presentation.
Present your information in a neat, bound document. Simplicity and ease of reading will make their task easier and up your chances of an approval.
7. Show your scenario planning.
It can be valuable to include all your financial worksheets on a CD for the bank manager to test your model and your financial predictions.
8. Act responsibly.
Your primary responsibility is the proper use ofthe loan and knowing you’re in business to make a profit. Make thisvery clear in your proposal.