9 Things you must do to maximize your chances of obtaining a small business loan

For your small business loan application to be approved, you must be able to meet the criteria for lending. Some organisations are less willing to take risks than others, so they will have stricter requirements. To make it much more likely that your application for funding will be approved, you will need to show the following:

1. Financial statements from the principals. This is especially important if security is needed.
2. How you will pay back the money you borrowed. For example: The Whizzbang Go4It's profits went up because it cost less to run.
3. The amount you need and how long you want to pay back the small business loan. (For example, a loan of $10,000 with a term of five years and payments every three months).
4. Ageing reports for accounts receivable (from debtors) and payables (from creditors).
5. The latest set of accounts for management. Again, something that came out of your accounting software.
6. 3 Years financial statements. You will need to show good financial information from your accounting software, preferably with a signature from your accountant or tax advisor.
7. Why they need the loan. The lender will look for something that is in line with your business's normal range and expertise. The money may pay for more than one thing, so you will have to pay for each one.
8. Specifics about the security you can offer the lender. This will make the lender feel better. If you're not willing to do something to protect yourself, why should they?
9. You need to include your business plan, which will answer important questions about your management skills and give information about the market in which you work. What you do for a living, etc.

If your business is new, the focus will be on your business plan and the security (also called collateral) you or your business can offer in exchange for the loan.

You need to give yourself time to practise presenting your case to the bank or lender to make sure there are no problems. Try it out on your friends and family. You never know, they might be so impressed that they want to invest or lend you money! You might find it helpful to play the part of the lender and come up with as many pointed questions as you can. The better your chances, the longer you wait. (But don't get stuck in the trap of analysis paralysis!)

Good luck!