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What do banks require to lend you money to finance your business start-up?
The best tool to obtain the necessary financing is that you have made a
detailed business plan. Then you know your business.
Banks finance operation
Banks do not normally finance innovative ventures that do not have a product
yet. They finance the operation of the business, e.g. buildings, work in
progress, stock and installations.
Be prepared
Do not go to the bank before you have prepared for the meeting. The banker would
like to see:
- A mini business plan explaining your product and how you will sell it
- An establishing budget
- An operating budget
- A cash flow budget
- The assumptions for the budget, e.g.: We expect to sell xx items at a
prize of yy
- The present income and expenses of the owner/owners
- If the business is in operation show the present turnover and expenses
Cash Flow
A cash flow budget shows your expected borrowing requirement in exact
figures. Based on your personal, establishing, and operating budgets you can
make the cash flow budget. Maybe you have to buy an accountant to work it out
for you – it is a bit difficult to make.
You are being evaluated
To grant your company a loan the bank will evaluate:
- Your personal background and personality in relation to your commercial
concept
- Your mission, motives, strategy and contemplated business format
- Your selling abilities
- Budgets and borrowing requirement
Can you stand an evaluation?
- Go to Investors and Others
- Calculate
your needed turnover and sales - easy online tool
Download free templates
- Download templates to help your start-up
Copyright © 2009 Dynamic Business Plan 21-05-2012
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