Walking into a bank for a business loan without any documentation is the quickest way to get turned down for a loan. And it is not surprising that a high percentage of potential business loan wannabes simply are unprepared to deal with what the bank needs to see when you apply.

When you visit your banker, he or she will need to have documentation for the specific dollar figure you are requesting a loan for, as well as a very detailed report of exactly what you are doing with the money, and why you feel that amount is neccessary.

Your banker will also ask for a projection of when you feel you can realistically pay back the loan, how often you will make payments, and how much you plan to pay on a monthly basis.

You will also be asked what assets you plan to offer as collateral, in the event you are unable to pay back your loan. Most often, real estate is used for collateral, but other assets are sometimes acceptable.

You will also need to offer financial history for your company (balance sheets, profit and loss statements) for at least the previous three years, if it is an established company. If this is a start-up business, you will need to have a concise and detailed business plan to provide to the bank.

You should also have your projected profits and projected cash flow for the next year, done on a month by month basis. This should include all projected money coming into the business, and where money will be going out of the business (suppliers, employees, etc).

A fully detailed report of where you envision your business to be each year for the next 3-5 years. This should include how you anticipate your company expanding (in terms of employees, products, locations, etc). You need to show the bank that you have plans for the future and you know where you want the business to be headed.

Your banker will also likely want to know your personal experience in business. Do you have any degrees or certificates that are relevant to your business? How long have you worked in the industry?

When you go into the meeting with your banker for a business loan fully prepared, you have increased the odds of being successful with your loan application. Never underestimate the power of preplanning.

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