Preparing a Loan Package

Preparing a Loan Package

See Also:
Can Factoring Be Better Than A Bank Loan?
Loan Term
Prepare an Investor Package
Good Budgeting Processes
What the Banker Wants You to Know
Does Your Management Team Understand the Financials?

Preparing a Loan Package

Knowing the process of preparing a loan package can be one of the most resourceful tools for business owners. Many feel loan package preparation is overwhelming and even frustrating if you are unsure of what to include in the loan package. Knowing the right time to apply for a loan to help grow or sustain your business is very important when planning your financial future; however it is only a part of the whole. The other piece of this puzzle is familiarizing oneself with the loan package requirements in order to secure the loan.

In the Lender’s Shoes

Before we consider the details of organizing a loan package, let’s put ourselves in the lender’s shoes. What would be some of the risk factors needing to be addressed before lending money to this particular borrower? This person will ultimately have to sell you on the idea that their business is worth investing in and the return on their investment is worth those risks.
After they have sold you on this idea, now it’s time to discuss the terms and conditions of the loan they are requesting. This is where the question of “how much” is answered and the repayment plan is offered.
Lastly, being that we are all so busy, time would probably be of the essence. Therefore, it would be very important for them to cut to the chase when convincing you that this investment you are making into their business is a win-win relationship for both parties. In short, in order to prepare a loan request, it is important to have a thorough presentation, but in the same manner getting to the point of the matter is essential.
Thus far, we have covered a general overview of preparing for a business loan. Now let’s get into some of the details of the documentation contained in the loan package.

Loan Package Template

1. Loan Request
2. Description of Company
3. Product and Services
4. Marketing Plan
5. Operational Plan
6. Management and Organization
7. Financial Plan
8. Appendixes
This template is the skeleton for the body of content needed when it comes to knowing how to organize a business loan package. It is an excellent guide regardless of the reason for the request. It does not matter where you are in the development of your company, be it start up, looking to expand, or wanting to improve on the sales and services. Seeking outside funding is a key part of that process. Answering the questions of “where do I go to get the money needed” or “when is the right time to apply for a loan” serves as a non-issue with most owners or CEO’s. However, the answer to the question of “how do I prepare a loan package” is not as obvious.

Loan Request Outline

The loan request outline included in this article will definitely get you started and moving forward on the right track. However, keep in mind the three main points:
1. Sell your Company
2. Discuss the Payback Plan
3. Time is of the Essence
For more tips on how to improve cash flow, click here to access our 25 Ways to Improve Cash Flow whitepaper.

Preparing a Loan Package
[box]Strategic CFO Lab Member Extra
Access your Strategic Pricing Model Execution Plan in SCFO Lab. The step-by-step plan to set your prices to maximize profits.

Click here to access your Execution Plan. Not a Lab Member?
Click here to learn more about SCFO Labs[/box]

Preparing a Loan Package

ARTICLES YOU MIGHT LIKE

Does your Accounting Department Produce Net Income?

Coaching the Entrepreneur: Learn how to know what you don’t know. How much should I spend on accounting for my company?     I have been in the accounting profession for 32 years, and for the last 6 years, I’ve owned my own consulting firm to assist companies with accounting challenges. There is one common theme that I

Read More »

Selling Your Business to a Private Equity Group

Private Equity companies are companies that have raised capital from investors and they have created funds. Each fund may have its own legal mandate. These are common examples of mandates: Invests only in oil and gas companies Is agnostic to what industry it invests in Invests only in companies it controls Private Equity companies come

Read More »

JOIN OUR NEXT SERIES

Financial Leadership Workshop

MARCH 28TH-31ST 2022

THE ART OF THE CFO®

Financial Leadership Workshop

Days
Hours
Min

August 7-10th, 2023

SHARE THIS ARTICLE
WIKI CFO® - Browse hundreds of articles
Skip to content