Understanding what the banks want to see
If you are applying for a bank loan to start a new business or are buying an established business, you will invariably need a business plan to present to the bank. The main options available to you at this point are to either download a template from a website and do it yourself, or engage a business consultant to do the business plan for you.
Taking either option will result in a business plan. The difference with a business plan for a bank loan is that the bank is the main audience for the business plan. This type of business plan is quite different to the standard business plan designed to generate business strategies and set the strategic direction of the business. The business plan is written with the specific objective of supplying the bank assessors with the relevant information for them to make a decision on whether they should take a risk on your business.
Once it has been recognised that the business plan is not about developing the business but explaining the business and the opportunities to the bank then we can move to tailoring the business plan to give it a better chance of achieving its objective.
To do this we want to present the information in a professional manner and laid out in a logical format. Over the years I have spoken to hundreds of business bankers and sought feedback about the business plans they have received from clients. The main comment is the number of business plans that are hand written and that just are irrelevant in terms of not addressing the bank’s information requirements. The time taken in sending feedback to the client, re-writing the business plan, reviewing it again, going back to the client to amend and to review again can stretch out to weeks.
The business banker managing the application is keen to assist to get the loan application across the line, however they cannot assist in the writing of the business plan as they are an employee of the bank issuing the loan.
This is where a business consultant comes into their own. We have prepared several hundred business plans for banks over the years and have a very clear understanding of what banks require in the business plan and can therefore assist in presenting the business in the most attractive light for the bank. We receive referrals from banks and therefore maintain relationships with a number of bankers and keep abreast of the latest developments in the bank’s lending criteria, products and other issues surrounding business lending.
The main things to include are:
- Director’s industry or business management experience
- What your contribution is in the establishment of the business
- Capacity to service the loan
- Security offered
We are so confident of our ability in preparing business plans for bank loans that we are offering a 20% money back guarantee on the price of the business plan if your loan application is rejected. Give us a call if you want to learn more.