Preparation and homework are keys to presenting a financing request to your lender for your small business regardless if you have been in business for some time or are just launching your dream venture.
Current financial statements and a sound business plan form the foundation along with a good credit score and positive cash flow.
Utilize the free resources available to you on the SCORE (www.score.org) and Small Business
Administration (www.sba.gov ) websites. The online business planning tool
(www.sba.gov/tools/business-plan/1 ) on the SBA website is great if you have never done a business plan. The SCORE Financial Projections template (www.score.org/resource/financial-projections-template) is a simple but comprehensive spreadsheet for developing projected financial statements a lender will expect. Validated and supported assumptions are the key to a well-developed business plan and form the basis for the financial projections.
If you are an existing business you will need to include the most recent thre years of financial history. Be prepared to include copies of the last three years tax returns. A lender will likely request additional information depending on the nature of your business and financing request.
You know your business best. Anticipate your lender's questions. You are asking the lender to invest in you as a partner in the business. They want you to demonstrate a return on that investment from well supported and documented cash flow.
Take advantage of the free technical assistance from either SCORE (www.score.org) , UWRF Small Business Development Center (www.uwrf.edu/CBE/Centers/SmallBusinessDevelopmentCenter) or the Pierce County Economic Development Corporation (410 S. Third St., UW-RF, CBE River Falls. www.pcedc.com; 715.425.3881)