5 Core Elements of a Small Company Loan Request


Source: David Worrell, Rock Solid Finance and RBS Citizens Financial Group

As a business grows, CEOs and CFOs may find themselves in need of a loan to execute fully on the growth initiatives needed to maintain momentum. To obtain bank financing, small companies need to adroitly manage through the loan request process.

Business loan applications can ask for an outline that includes a clear summary of your product or services as well as financials, which will show the lender your credibility as a borrower and your level of risk. You may have created a business plan when you first started your business, and should update it as your company grows and your need for capital increases. You can use this to help construct your request for financing, which should include the following five elements.

  1. A clear, professionally articulated summary: Who are you, what do you sell and whom do you serve? Are you incorporated? If so, how? Who are the principal owners and key staff members? Who are your competitors? What have you accomplished thus far in terms of patents, prototypes and locations? Outline your company’s purpose and basic information as clearly and succinctly as possible. You can go into greater depth later in the plan.
  2. Current, complete financials: Include documentation of your current profits, sales, returns on investment, cash flow and debt-to-income ratio in numbers and charts. Your financing request should also include your balance sheet and a copy of your current assets and liabilities as well as the balance of any small business bank accounts to demonstrate your ability to repay a loan. Your personal finances, like tax returns, could also be considered so be prepared with that information if necessary. Check with your lender to see if there is other financial documentation they require.
  3. Financial requirements: How will you use the small Unsecured Business Loans you are requesting? Are you trying to boost your inventory with working capital, fund your small business marketing plan, expand and obtain a business mortgage, renovate your current space or hire new staff? Make sure your request for financing clearly states the amount you need to borrow and what you are borrowing for. If you are taking out a loan that requires collateral, document what you will be putting up, whether it is your inventory, your building or other assets. Even if this information isn’t requested on a small business loan application, your lender may ask these questions and you should be prepared.
  4. Growth plan: Where do you see your business in the next year or next five years? What has to happen in order for you to meet your goals? A financing request should include realistic financial projections and data on how your small business loan can help you reach those goals.  Will you need to hire new employees or purchase new space or new equipment?
  5. Small business marketing plan: While the bank may not ask to see this in a small business loan application, it’s wise to have a marketing plan in place to bring in new customers or let existing customers know of exciting new changes. Plus, having a plan in place when you apply for financing may give a lender more confidence in your ability to reach your goals and repay consumer loans cincinnati oh.

Obtain a small company loan from a trusted lender

Take a look at the small business plan you created when you started your business and look at your current financials to see how large a small business loan you need to make your desired growth happen. Then, speak to a trusted lender to find out about the different loan products they offer. Compare the rates and benefits of the different small business loan options, and choose one that best aligns with your business plan and submit a request for financing.

About Scale Finance

Scale Finance LLC (www.scalefinance.com) provides contract CFO services, Controller solutions, and support in raising capital, or executing M&A transactions, to entrepreneurial companies. The firm specializes in cost-effective financial reporting, budgeting & forecasting, implementing controls, complex modeling, business valuations, and other financial management, and provides strategic help for companies raising growth capital or considering M&A/recapitalization opportunities. Most of the firm’s clients are growing technology, healthcare, business services, consumer, and industrial companies at various stages of development from start-up to tens of millions in annual revenue. Scale Finance LLC has offices throughout the southeast including Charlotte, Raleigh/Durham, Greensboro, Wilmington, Washington D.C. and South Florida with a team of more than 30 professionals serving more than 100 companies throughout the region.