Small business bank loan

[Uzoma]

I'd be grateful if anyone could offer me some good advice on how to improve my chances of being successful with a small business bank loan. I'm looking to borrow about �10,000.

[Maypole]

Well assuming you have a sound business proposition, your strategy is well thought out and you have developed a business case then in my experience I would recommend:

- understanding the numbers backwards, forwards and upside down. You must know CASHFLOW (so you can survive) as well as P&L (so they know the business model is sound)
- knowing what the key financial levers are, what the risks are with those and what your risk management strategy is
- having a cash flow forecast of varying granularity over time ie weekly for first 3 months maybe, then monthly for 18 months then maybe quarterly up to 3 years
- knowing exactly what you want the money for and why you are a good bet for the bank.

Prepare (or bribe someone else to do it for you) and nicely printed pack of text explaining your business, some charts showing financial trends over time and some excel sheets with the numbers.

I know it probably sounds a lot of work but it will be worth it to clarify your thinking and may give you teh edge when it comes to increasingly cautious banks.

Good luck!

[Maypole]

oh , Im sure you wont but whatever you do DONT say "about �10k" !!

Pick a number that you can justify and request it clearly. If there are options by all means say "�8k as a minimum in order to..... but Im really looking for �10,000 because....."

Anything else can sound like you just want a pot of money to play with!

[WoWo]

The banks generally want you to put in the same level of money, so if you are borrowing �10k they want you to invest the same sort of money, or provide some sort of collateral i.e. an equivalent portion of your house.