Applying for a Business Loan

by: Matt Bacak

Copyright 2005 The Powerful Promoter

The process of applying for a business loan is a stringent one as compared to the standard procedures in obtaining a home mortgage loan or a personal loan. This is probably due to the fact that business loans contain a greater risk element as compared to other loans. Therefore, lenders need to exercise greater caution and emphasis when evaluating business loan applications in order to minimize their risk exposure.

With that, lenders evaluate their applicants based on the information that are provided as well as their judgment of the viability and profitability of the business being financed. Thus, business loan applicants will be required to submit a loan proposal along with their applications with the purpose of creating a positive impression upon the lender.

The first element of a loan proposal is an executive summary, providing short descriptions of the type of business and the industry, the purpose and usage of the loan, the proposed repayment conditions as well as the intended loan period. After that, the company information is provided, enriching the reader with the nature of the business, the location of the business, company history, the products or services provided, key differentiation factors of the company or the product, the general growth of the industry, competitive information, growth potential and target customers.

Loans (Photo credit: zingbot)

It would help if you could include your company marketing strategy, detailed product information, historical information as well as projected growth plans for the company. Apart from that, if you plan to incorporate product or service extensions in the future, you should provide these descriptions within your loan proposal. If possible, geographical expansion plans will help in the proposal.The next area that needs to be showcased in the proposal would be the credentials and experience of each member of the management team. Impressive credentials will provide assurance to the lender that the company is managed by individuals who are responsible and capable. This is important as having the wrong people managing the company could be detrimental for the business.

In any loan application, historical records are essential to be used in evaluating the performance of a company. As new companies do not yet have these records, the financial records of the owners will be used as the basis of evaluation. Income tax returns forms are also required by lenders. All of these records provided should be the latest copies less than 90 days old, with the exception of the income tax returns form.

If the loan is applied for an existing company in active operations, company financial statements, including profit and loss accounts, balance sheets and the net worth reconciliation record should be included in the loan proposal. Again, all of this information should also be the latest and less than 90 days old. Additionally, a listing of accounts receivables and other short term and long term debt should be attached.

On the other hand, if the loan application is submitted for a new business, a pro-forma balance sheet and profit and loss account should be provided. Apart from that, a cash flow projection for the upcoming year is drafted to indicate the possibility of recovering the debt. This also means that projected revenue, profits, costs incurred and expenditure should be listed out with definite explanations provided as well as a list of assumptions.

If you possess assets that you wish to use as collateral for your loan, details for this should be provided to the lender as well. It is often common for lenders to request for dual sources of repayment in the event that one source is defaulted. This means that if the business owner defaults on his repayments, the collateral can be sold in order to recover debt.

Finally, other documents normally required for a loan application would be items like the article of incorporation, lease agreements, partnership agreements, license, references, etc. As the list of required documentation, information and attachments differs between lenders, it is best to check with the individual lender on their specific information and documents required to be attached with the loan proposal.

About the author:
Matt Bacak, The Powerful Promoter and Entrepreneur Magazine e-Biz radio show host, became a “##1 Best Selling Author” in just a few short hours. He has helped a number of clients target his specialty, opt-in email direct marketing systems. The Powerful Promoter is not only a sought-after internet marketer but has also marketed for some of the world’s top experts whose reputations would shrivel if their followers ever found out someone else coached them on their online marketing strategies. For more information, visit Bacak’s site at or sign up for his Powerful Promoting Tips at

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The Basics of Borrowing Money

by: Jose Valdez

Are you thinking about starting a business but have no money to do it with? Well, you’re not alone. This article will tell you the basics of borrowing money.
A loan is money that is borrowed, and has to be paid back along with interest. If the money is borrowed from an institution such as a bank, this is called a commercial loan. Money that is borrowed from a friend or a relative is called a personal loan.

The borrower, or debtor, is the business or individual that takes out the loan. The lender, or creditor, is the source from which the money was borrowed. The term, or period, is the time that is specified during which the borrower has to use the money borrowed before he has to repay the loan.

The maturity of a loan is when a loan term reaches its end. The Principal is the amount that is borrowed from the lender. When you or your business borrows money, the lender wants to know when they will get their money back. Keep this in mind when you are looking for a lending source.

If the business is not able to repay the loan, the lending source has a right to legally come after assets to recoup it’s money. The extent to which you are personally liable depends on the business structure your business is operating under.


Borrowing from Institutions
Business loans generally fall into two main categories: short term and long term loans. A short term loan is a loan that is to be payed back within one year.

Examples of short term loans include:
Working capital loans
Accounts receivable loans
Lines of credit
Long term loans are loans that are to be payed back typically from one to seven years. Long term loans are typically used for:
an expansion of a business
the purchase of equipment
real estate
Most business loans that are used for starting a business are long term loans.

When you approach an institution for a business loan, it will be looking at you as the business owner as closely as it will be looking at the business itself. One of the ways lending institutions make money is by lending money and they want to be as sure as possible that they get back their money with the interest owed.

The time between applying for a loan and learning that you have been approved (or disapproved) can vary. If you are disapproved, you may be told almost instantly. If you are approved, it may take a few days though it usually takes longer. It may even take several months to learn whether you or your business has being approved for the loan.

Borrowing from Family and Friends
If you don’t want to, or can’t get a commercial loan, you can consider getting a private loan from family or friends. This is usually real informal. However, you need to be careful because this can lead to ruined relationships.

If you are getting a private loan, it is in the best interest of the lender to have an agreement put in writing. The written agreement should state the principal, the interest charged and the terms of repayment. This puts the lender in better position either write off the loan on his or her tax return or to legally come after you.
You are free to reprint this only if the article text link is included:

If You are Starting a Business visit
Jose Valdez is the owner/operator of and

About the author:
Jose Valdez is the owner/operator of www.AGuideToStartingABusiness.comand

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9 Things You Must do to Maximize Your Chances of Obtaining a Small Business Loan

by: Neil Best

To get approval for your small business loan application, you must be able to meet the lending criteria set down. Some organisations are more risk averse than others, and will therefore have more stringent criteria.

To vastly increase your chances of a successful funding application, you will need to present the following information:

1. The reason for the loan. The lender will be looking for something that fits within the normal range and expertise of your business. The amount may cover a number of items, so you will need to cover each.

2. The amount required, and the repayment term of the small business loan you want. (e.g. $10,000 term 5 years, payable quarterly).

3. Details of how you will repay the amount borrowed. For example, “From the increase in profits of reduced running costs of the Whizzbang Go4It”

4. Details of security you will be able to offer to the lender. This will act as reassurance for the lender. If you’re not prepared to put up some aspect of security, then why should they?

5. You will need to include your business plan which will serve to answer essential questions relating to management capabilities, information about the market you operate in. What kind of business you are in etc.

6. 3 Years financial statements. You will need to present quality financial information from your accounting software, preferably signed off by your accountant or tax advisor.

7. Latest Set of Management accounts. Again produced from your accounting software.

8. Accounts receivables (debtors) and payables (creditors) ageing reports.

9. Principals financial statements. – Particularly required if some form of security is necessary.

If you are a new company, the emphasis is going to be on your business plan , and the security (also called collateral) you or your business can provide against the loan.

You must take the time to practice presenting your case to the bank or lender to iron out any glitches. Practice on your colleagues and family (you never know, they might be so impressed, they’ll invest or lend!). It may help to role play the lender and come up with as many pointy questions as possible. The more time you take the better your chances will be. (But remember, don’t fall into the analysis paralysis trap!)

Good luck!

About the author:
Neil Best is an accountant with over 15 years experience in business finance. This article and other useful business finance information such as making effective business plans and sourcing and applying for business grants can be found at

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5 Home Biz Mistakes Every Entrepreneur Should Make!

by: bb lee

by BB Lee (C)2005

In a previous article appropriate steps to start a home based business were discussed.

This important article will review the 5 top mistakes many home based business owners make that might evolve into a great success story.

Warning! This approach is not for everyone. One theory is readers will learn a new way of thinking and perhaps propel their business ideas into motion.

Let’s get started with the list!

1. Business Plans. Many article’s online vow by the business plan. Every new business owner must draft a business plan if they want to succeed.

One successful business owner online never thought of drafting a business plan. He learned the hard way. He made many errors but claimed the learning experience
was a powerful teacher.

He further stated the lessons he learned were better than any course in business school or college. He soon learned how to deal with the many ups and downs in the
business world. Dealing with frustration. All things you learn from the school of hard knocks.

2. Education. Once again many experts think several degree’s are the key to immediate success in any chosen field. Many successful entrepreneurs never went to college. And quite a few barely finished high school. Success is not always in the books you read but in how you deal with your business in the real world.

3. Rushing. Experts believe you should take your time and wait to select the proper business for you and your background or education. Taking time to study the various ideas is key to success. Others see an opportunity and immediately grab it.4. Over confidence. Believing you will be successful and ignoring negative opinions from friends and family. Family might have good intentions, wanting to save you from making an error in judgement, but they might throw a wrench in your business idea. Halting the business venture altogether.

5. Unrealistic view. Always seeing the good side. Thinking positive. That yes you can succeed in this business. Positive thinking is an asset every self employed business owner should own. Many business owners with a positive outlook continue striding forward where others simply give up.

That’s the list. It bares repeating that going against expert advice is not for every new entrepreneur. But many new home biz owners found great success in following their own path.

BB Lee is Editor And Publisher of SmallBizBits News! If you like this article subscribe to SmallBizBits Now! For new articles, advice, tips, unique start-up ideas, ebooks, reports.

About the author:

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3 Essential Tools for Starting and Maintaining a Small Business

by: Ryan HoughWe believe that there are 3 factors that drive the success of small businesses.

1) Acquiring start-up capital
2) Finding customers
3) Accounting for, budgeting and controlling sales and expenses

The following resources will help your small business achieve these success factors.

Acquiring Start-Up Capital

An adequate supply of capital is essential as many profitable businesses fail because they don’t have enough cash to pay their employees and suppliers. But what is an adequate supply of capital? The only way to tell is by doing a significant amount of research on your potential market and formally documenting this in a business plan. I’m sure you know that a business plan is a very important document that is crucial to convincing your banker to lend you money.

There are two ways to obtain a business plan.

1) Do it yourself by amending a business plan template, or
2) Hire a professional to do it for you.

Obviously obtain 1) will be a great deal cheaper.

Our research led to a website that has over 60 high quality and free business plan templates. We also found a directory that you can use to easily find a business plan writer in your city – where ever you live in the world.

Finding Customers

Finding customers is a difficult and expensive task for service business owners such as accountants, lawyers and plumbers. We believe that a cost effective marketing strategy for service business owners is to simply give all their personal contacts a few business cards.

Our research led to a few websites that have pre-designed business card templates. We felt that the diversity and quality of these designs was outstanding. In addition, we found that you can obtain a significant saving by finding a printing service on the Internet. We found that you could get 2,000 full color business cards for as little as US $150.

Gnomes' three phase business plan

Accounting For, Budgeting and Controlling Revenue and Expenses

Accurate accounting is very important for small business owners. It’s essential that you have timely access to information that could make or break your business. If stocks are running low – you need to know about it. If a large proportion of your debtors haven’t paid – you need to know about it. If you do not react to these situations quickly you may have a situation where you don’t have enough money to pay your employees – or worse still someone is stealing cash out the till.

Our research led to a website that compares and reviews top accounting software for small businesses. The cheapest software cost US $89.99 and the most expensive software cost US $1,499. It was interesting to note that the top 3 ranked websites were not the most expensive and cost between US $250 – US $300.

Hopefully you now have an idea of some of the tools that you can use to grow and maintain your small business. If you would like to benefit from our research please visit our website. We do not charge for this research and offer the content freely on our website.

About the author:

Ryan Hough is the webmaster of best quality small business, who’s aim is to help you save time and money by finding reviews and case studies that will enable you to choose the best resources at the right price.

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The 4C’s of Branding

By Michelle L. Casto, M.Ed.

Branding could be defined as a guiding philosophy for building business. The benefits of building a strong brand are tremendous. With a strong name brand, you have instant name recognition, can charge higher fees, get to choose who you work with, and can handle economic changes and challenges with greater ease. In addition, a strong brand demonstrates the four C’s of branding: Clarity, Competence, Communication, and Constancy.
Does your brand pass the ‘Four C Test?’

C1: Clarity
Strong brands are clear about who they are and what they do. They have named and claimed their domain, often in the form of a mission statement that is shared with employees, customers, and the community. For Microsoft Corporation, Bill Gates envisioned a computer on every desk in the world.

My mission statement is clear and concise.
1____(no) 5_____ (maybe) 10_____ (yes)

C2: Competence
Strong brands have suitable skills, qualifications, and experience related to their field. They prove their worth by under promising and over-delivering. These are the people and companies you call when you need the job done right the first time. Fed Ex is known for getting your package there “no matter what.”

I have full confidence in my ability and products/or services.
1____(no) 5_____ (maybe) 10_____ (yes)

C3: Communication
Strong brands have a variety of ways to get their message delivered to their intended audience. Nowadays, companies have to use traditional and non-traditional ways of communicating with their customers. With my own coaching business, I give in-person seminars, write books, workbooks, articles, an ezine, advertise in magazines, radio/television stations, maintain two websites, and use other internet services and sites to communicate locally and globally.

My communication system if far-reaching and varied.
1____(no) 5_____ (maybe) 10_____ (yes)

C4: Constancy
Strong brands are highly visible to their target audience. They are constantly there for their customers, prospects, and networking contacts. The Oprah empire is a great example. She is everywhere! From her weekly tv show, to O magazine, numerous media appearances, and volunteer activities— Oprah is constantly in the public eye.
My visibility is high and consistent.
1____(no ) 5_____ (maybe) 10_____ (yes)

In an issue of Fast Company magazine, it said, “We are CEO’s of our own company, Me, Inc. To be in business today, your most important job is to build a market for the

Fast Company (magazine)
Fast Company (magazine) (Photo credit: Wikipedia)

brand called You. The good news is that everyone has a change to stand out. Everyone has a chance to be a brand worthy of remark.” When building and branding your business, you need to keep the four C’s in mind, because no brand can become the best brand without passing the ‘Four C Test.’


How does your brand rate?
0-15: You need to work on your branding strategy
15-30: You have made some headway with your brand strategy
30-40: You have a solid name brand strategy

About the author:

Michelle L. Casto is a whole life coach, speaker, and author of Get Smart! About Modern Romantic Relationships, Get Smart! About Modern Career Development, and Get Smart! About Modern Stress Management. Her coaching practice is Brightlight Coaching, she helps people come up with bright ideas for their life and empowers them to freely shine their bright light to the world.
Coaching is an empowering and enlightening experience. Michelle can work with you to build and brand your business. Contact her for a free 30 minute coaching session: (361) 949-0337
or visit

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Branding: Do You Stand Out From the Crowd?

by: Susan Dunn

Branding means finding a way to stand out from the crowd. Are you branded?
Bill, one of my clients, is trying to build a coaching practice. When I ask him what he wants to do, what kind of coaching, he says he wants to help people reach their goals and get more in touch with themselves.

Mary is also starting a coaching practice. She says she wants to help clients find out who they are, and make great strides in their careers.

All good coaches help their clients touch the source, as I call it, discover their strengths and set and reach new goals. All chiropractors offer spinal adjustments. All businesses that sell widgets, sell widgets.

Why would someone choose Bill or Mary then, instead of one of the tens of thousands of coaches out there?

“90% of coaches feel they are highly differentiated from other coaches, says William Arruda, The Branding Coach, who’s had 20 years experience in international branding. “Yet,” he adds, “only 10% feel strongly that their differentiation is visible to their ideal

Open Space: LinkedIn, Prospects, Leads

clients.” William helps individuals and businesses define their unique promise of value and build strong, memorable brands.

Now let me tell you about Bill and Mary as I see them. Bill worked with autistic children for 15 years. He’s empathic, gentle, versed in psychology, and has led many men’s growth groups. We’re working on defining his ideal client.

Mary comes from a corporate background, an HR professional with an MBA. She’s focused, forceful, and thinks ‘career’ first. She knows her ideal client – women in middle management.

Each coach has a very different background, personality style and preferred ideal client. How to get this across is what branding is about. It means finding the way to stand out among your peers in a way that helps your ideal clients find you. Are you branded?

About the Author

Susan Dunn, The EQ Coach, GLOBAL EQ. Emotional intelligence coaching to enhance all areas of your life – career, relationships, midlife transition, resilience, self-esteem, parenting. EQ Alive! – excellent, accelerated, affordable EQ coach certification. Susan is the author of numerous ebooks, is widely published on the Internet, and a regular speaker for cruise lines. For marketing services go here.

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About Branding

by: Joan Marques

Branding, type-establishment, character-determination, name it whatever you like, we are practicing it all the time. Admitted, in business the skill of developing a rapid insight could be invaluable. Imagine how great it would be if we would all develop the ability to make a snapshot of every job-applicant, in order to see where his/her strengths and weaknesses were? Well, the positive side, according to the lecture I received today is, that we already do that – unconsciously. We “brand” people the moment we see them. However, the negative side remains that we don’t always execute the branding process in the right way. It is this very branding – this first moment snapshot – that guides our approach toward another person. It is branding that makes us extra open to some and overly defensive toward others. There are some people that we just can’t stand, no matter what they do… and others that just can’t go wrong with us, no matter how often we will receive warnings from third parties! As I also learned tonight, we tend to ignore those warnings, and sometimes even their realization, because we don’t like to admit to ourselves that our first impression was wrong?

Another funny thing I observed tonight is, that people will easily tell you, when asked, that they prefer to hire employees that are their opposites, “so that performance gaps can be filled.” This, as we all know by now, is just an idealistic dream, a song that we know by heart and therefore sing so well; yet don’t understand the words of. For in reality, it has been proven time and again that no one really goes for diversity, because we have an inborn tendency to stick with whatever is familiar to us, and that is…right!… the person with most of the characteristics we know best: the ones we own ourselves!

But in case we, as potential leaders, really want to establish an ideal work-environment with the necessary diversity in characteristics, backgrounds, and qualities; how can we, make a mental snapshot to be sure that we’re hiring the right people given our current team of workers? Well, easy: if you know what you have, you also know what you lack, and ? therefore – need to find. If you know about yourself, for instance, that you are a fast-paced, goal-oriented decision-maker (let’s call this type 1), you want to get an analytical and stabilizing element to balance your team. People with persuasive tendencies (type 2) usually don’t mind showing their emotions, while the type 1 individuals ? the ones with controlling personalities – will hide their feelings and just go for the job? fast! People with stabilizing skills (type 3) will seek to solve interpersonal problems. The ones with analytical skills (type 4) will review and re-review the process endlessly before shooting it to execution. Interestingly, most people have 2 types represented within them: a dominant and an underlying type. The dominant one is the one you represent, while the underlying one determines how you get your results.

It’s an interesting skill for leaders to look into. And an eye opener for people who thought they knew themselves for decades. However, a word of caution is in place here, no matter what personality test you take, remember that these are mere snapshots that are subject to change through time and in different situations: one can, for instance, predominantly be a controller at work, yet more of a persuader in the private domains of life.

Branding people on basis of a first impression is therefore never a good idea, even though it’s hardly preventable. The only thing we can do, now that we are aware of this tendency within us, is to keep an open mind for 2nd, 3rd, 4th and even 5th impressions. Sounds reasonable? I thought so too!

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Internet Home Business Opportunity

by: Suzanne Arthur


Find an and start making money almost immediately. Getting started will not take a lot of time or money. You won’t be sending out spam. Start making money as soon as you apply the techniques you learn. An Internet home business opportunity is a great way to earn extra money, or start a full-time business if you wish. This new field is wide open and expanding every day.


One thing to keep in mind when seeking new money-making opportunities is low start-up costs. An Internet home business opportunity does not require a huge investment of either time or money. Start with $10. and put in a couple of hours a week. Make big returns for very little start-up. In the recent past you would have had to spend at least six months getting into this niche but now you don’t even have to spend time building a web site. You don’t even need a web site. Internet home business opportunities are the low-hanging fruit of the Internet.


You won’t need to send out spam. If you have a computer and an Internet connection you can start working immediately. An Internet home business opportunity will help you redefine what work means. Work where you want, when you want. Are you a late night-owl? Like working at the local Internet cafe? You decide. Maybe you want to put in a concentrated amount of effort in the evenings and be free during the day. Schedule your own time. An Internet home business opportunity is brilliant for people who want to be in charge of their own income, set their own hours and define their own professional goals.

That's BusinessNew products and services are constantly being added to the Internet. The number of products and services available far exceeds the number of advertisers for them. More products are added every day. This is where the unlimited opportunities are in business today. If you are a resourceful and creative thinker, even better. Whereas those personality traits that mark you as independent may not have worked for you in someone else’s company, with an Internet home business opportunity they’ll benefit you. Be your own boss. The more you learn about how these techniques work, the more fun it will be for you. You’ll be able to expand your business as much as you want.

The Internet is the new frontier. Start an Internet home business opportunity and be a pioneer.

About the author:
Suzanne Arthur is a freelance writer, educator and Internet entrepreneur. You can learn more about the Internet home business opportunity that Suzanne uses at


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Running Your Own Business: The Options

by: Tony Luck

Very few people ever got rich by working for someone else. Leaving aside pop musicians, sportsmen and similarly gifted people, the only way to acquire wealth by work is to build a business of your own. The type of business you decide upon will depend on: a) how much money you have available as start-up capital and working capital; b) your business idea; and c) your confidence level.

There are three types of business: 1) the traditional one in which you are reliant solely on your own efforts; 2) a franchise where you follow a proven idea and receive considerable training and back-up from the franchise company; and 3) network marketing.

Business (Photo credits:

Each business type has its pros and cons.

• The traditional business requires considerable financial input, either from your own resources or part-funded by your bank. You may need to rent premises; buy equipment; hire staff; pay for advertising, brochures, stationery, and stock. A frighteningly high percentage of this type of business fails in the first year. To succeed you need: a good idea, considerable financial backing, good health, an understanding spouse, and stamina. If you do succeed you will own the business outright and benefit from all the profits.
• Franchises have a high success rate. Banks like them because each franchise operation has a proven track record and thus the banks can accurately judge the risk, consequently they will lend money for this sort of start-up. However, all the support and training comes at a price: the initial entrance fee is likely to be very high, and a percentage of the business’s turnover has to be paid to the franchise company.
• Network marketing, also known as multi-level marketing, has many advantages and few disadvantages. The entrance fee is low and the ongoing expenses are even lower. A network marketing business can be started in your spare time – in fact that is the best way to approach it. Start small, and keep at it. The secret is perseverance, get past the first year and you should find the business has a sound foundation from which you can build a serious income. It is said that 95% of those who survive ten years in network marketing become wealthy beyond their wildest expectations.

So which type of business is for you? If you wish to provide a service or product where you have previous experience from, say, a former employment, the traditional business will be probably be the best choice. However, if you are just tired of working for someone else and making them rich and wish to strike out on your own, then a franchise or network marketing must be the preferred option. The choice then is determined chiefly by the funds you have access to, and the time and effort you wish to put into your enterprise. A franchise will require substantial funds and 100% commitment. You are jumping in at the deep end, although the franchise company will provide training and support to help you to swim. On the other hand you can ease yourself gently into network marketing by starting part-time while you continue with your current employment, building your business by ploughing back profits if necessary. Persevere and there will come a time when the income from your own business will be sufficient to support you financially. You will then be able to leave your employment and concentrate on your business, spending more time on it or enjoying considerable free time with your family.

About the author:
Tony and Katy Luck run two mlm businesses: a team of Avon reps, and as independent distributors offering the best value electricity, gas and telephone service. Visit their sites at http://www.u-save.organd

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