How,Avoid,Getting,Turned,Down, business, insurance How to Avoid Getting Turned Down for a Bank Business Loan

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If your responsewas the first option for each question, then your company just may not be atthe stage needed to access bank financing for your business. It does not meanthat there is no hope. It just means you will likely have to pursue one of themyriad other types of financing available for small business owners with ashort or spotty financial track record. Or you just may need to shift yourfocus to community or specialty banks. Refer to some of the blog posts on theSmall Business Finance Forum blog for what types of banks may get you to yesand for alternative capital sources. If you respondedyes to the second option for each question, you must work on your packaging andpreparation before you approach another bank or any other financingsource. If you are not prepared, if you cannot provide a modicum of afinancial statement or other finance-related information, and if you cannotadequately describe your business and market in words, then you are extremelyunprepared to pursue bank financing. In this case, you will likely continue tobe turned down by banks and by many of the alternative financing sources. A bank does notwant to see a business plan when you make your initial and subsequent requestsfor a loan. Instead, they want to see avery condensed, highly relevant synopsis of the business plan called theExecutive Summary. This is typically three tofive pages long and includes the following: 1)     General overview of the business; 2)     Industry overview; 3)     Market overview including competitive advantage;4)     Management team including board of advisors;5)     Growth plan for the business; 6)     Financing need and why; 7)     A chart of sources and uses of funds. Each sectionshould be about one to two paragraphs each. Attached to the Executive Summary should be historical financials for the pastthree years, audited or reviewed. If the financials have not been audited orreviewed by a CPA – and the overwhelming majority of small business financialshave not – then a copy of the business tax returns for the prior three yearsare absolutely necessary. The decisionmakers at banks (typically, vice president level and above or loan committeescomprised of these individuals) do not have time to read a 30-40 page business plan.They do have time to read an Executive Summary that provides them with therelevant information from the business plan showing that the applying companyis a good risk. An Executive Summary is easy to pass around to others on theloan committee to review or to share with another decision maker who hasquestions. Bankers know how to read financials. But your Executive Summaryprovides the background on why those financials are what they are and howlikely they are to continue. About the Author:  Tiffany C. Wright is the president of Toca Family BusinessServices, a C-level interim management provider and strategic advisoryfirm, and the author of "Solving the Financial Equation: FinancingSolutions for Small Businesses", available on Amazon and "Help! I Need Money for My Business Now!",available at www.cash4impact.com. Bothbooks provide overviews on business financing alternatives and the how-tos toobtain financing. Over the last six years, Ms. Wright has helped companiesobtain over $31 million in financing and a similar sum in contracts andpurchase orders.  Ms. Wright has a BS in Engineering and an MBA in Financeand Entrepreneurial Management from the Wharton School of Business, Univ. ofPenn. She volunteers, sits on non-profit boards, and often speaks at businessevents.