A CPA firm serving Lehigh Valley & beyond for over 40 years
5235 Oakview Drive
Allentown, PA 18104
(610) 366-1400; Fax 366-9440
Preparing a Loan Proposal
Start with a solid plan: Requesting a business loan without adequate preparation sends a clear message to the lender: High Risk! Therefore, it pays to be prepared and organized in your approach for financing. This means you know exactly how much money you need, why you need it, and have a clear plan as to how you will pay it back. In other words, you must convince the lender that you are, in fact, a good credit risk.
Know the length of loan term needed: As explained in the prior article, generally, loans can be classified under two broad categories: short-term and long-term. Short-term loans such as lines of credit are best suited for day to day working capital purposes, accounts receivable financing and so on.
Long-term loans are generally associated with financing real estate, equipment and other major capital expenditures where the objective is to match the loan life to the asset life.
Writing a Loan Proposal: The proper presentation of your company and your loan needs to the lender is important. Obviously, the lender is only motivated to make loans that have a high probability of full repayment.
A well written loan proposal will improve your chances of obtaining the desired level of financing. Unless the lender is already familiar with your business through an existing relationship, you will likely need to provide more comprehensive information. For example, the proposal should contain the following key components:
Copyright © 2002 Miller, Bahr & Wills, P.C., All rights reserved