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Others are unsuccessful primarily because they lack knowledge regarding sources that can provide funding and / or business loans. Listed below are some tips that can immensely improve your chances of getting a business loan.
A large sum of money is required to start a business. Hence, funding agencies have stringent rules and regulations so as to minimize risk. Business loans are only approved when the application meets the criteria of the funding agency. The foremost requirement of every business loan is to have a quality business plan. There are a variety of factors that should be included while preparing a business plan.
- Reason for a Business loan: Innovativeness is the foremost quality that funding agencies look for. A business plan should have a clear explanation regarding the expertise, market value of the product or service and requirement of funds.
- Loan Amount: This is another vital factor. Most funding agencies have experts who can assess the value of the loan required for a particular type of business. You should be realistic while determining the amount of loan required for running the business. Also to be included in the business plans are details like utilization of the loan amount and details of collateral to be offered as security.
- Repayment: A good business plan should have details of repayment plan and the way in which loan amount will be repaid to the lending agency.
- Business Details: One should also provide details about the management, expertise, roles in the organization and their capabilities.
Every business plan should be duly supported by proper documentation.
- Personal financial statements for the last 3 years
- Personal income tax returns
- Financial statement of the company including balance sheet, profit and loss statement and tax returns
- Cash flow estimates on a monthly basis
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