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Debt Financing FAQs

Chances of getting bank loan

Over 20% of companies are underfinanced. But when you look at companies that have grown their revenues by 20% or more over the past three years, you’ll find that over 30% of them are underfinanced! It is obvious from this data that it is the young, high performing companies that are currently experiencing the greatest difficulty in obtaining the financing they need to operate their businesses. Many entrepreneurs are so discouraged that they don’t even apply for financing. Only 60% ...

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Preparing a Loan Proposal

An important area of financial literacy for entrepreneurs concerns the ability to establish an effective commercial banking relationship and to prepare a loan proposal. No small or growing company survives and prospers without some debt component on its balance sheet. Whether a small loan from family or friends at the start or a sophisticated term loan and operating line of credit from a regional commercial lender, most companies borrow some amount of capital along their path to growth. The use ...

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How to prepare loan package for small companies

Finding financing to start and expand a company is an age-old problem, and most entrepreneurs find it to be one of the greatest struggles they face. While the process can be time consuming, frustrating, and intimidating; however, if you are informed and well prepared, your chances of securing the needed capital are greatly increased. In putting together a loan package, ask yourself the following basic questions. The answers to them and the information provided to back them up are essential ...

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Applying for a Business Loan

When applying for a loan, you must prepare a written loan proposal. Make your best presentation in the initial loan proposal and application; you may not get a second opportunity. Always begin your proposal with a cover letter or executive summary. Clearly and briefly explain who you are, your business background, the nature of your business, the amount and purpose of your loan request, your requested terms of repayment, how the funds will benefit your business, and how you will ...

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How to prepare a Loan Proposal and get funded?

Developing your loan proposal Your loan proposal must answer the following questions: Who are you? How much do you need? How are you going to pay it back? What happens if you can’t pay it back? Elements of your loan proposal Generally, the loan proposal is comprised of the following elements: Summary: Comes first; written last. This should be clear, concise, accurate and inviting. You want to summarize how the proposed loan will be used, how it will be repaid ...

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Why should I use Consultants?

“Consultants” in this context is a rather broad term referring to the persons providing services to capital seekers in obtaining financing for a fee. Such persons can be accountants, lawyers, management consultants and financial advisers. Consultants can be a valuable contributor to your search for capital. Good consultants have contacts and experience in the local financial industry and knowledge of specific requirements by different financing sources. Some financing sources rely on consultants to bring in well-prepared business proposals.

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How To Write A Business Loan Proposal

In addition to standard loan documents, a lender expects to see a written proposal when someone applies for a business loan. This is your chance to highlight the most exciting and promising aspects of your business and to prove to your lender that you’re a prime candidate for a loan. Step 1: Submit a cover letter with your proposal. This should be a brief introduction to your company, the size of the loan requested and the purpose of the loan. ...

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How to apply for a small business loan?

Applying for a small business loan is not simply a matter of “ask and you shall receive” – the truth is, many entrepreneurs do ask but few actually receive. The reason so many people get turned down isn’t that they have a bad idea for a business (in fact, many have brilliant ideas). Rather, the reason is that these people fail to convince lenders that they have a solid plan for how to use the loan to grow their business. ...

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What You Should Know Before Applying For That Bank Loan

Virtually all businesses will, at some time, need to obtain outside financing. For the small business owner, this generally means obtaining some type of bank loan. And for many, this turns out to be a frustrating and difficult experience. It doesn’t have to be that way, however. Whether you are looking for financing to purchase a new business or are in the need of seasonal financing, proper planning will increase your chances of obtaining the needed financing. A side benefit ...

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