The Canajlian Jewish News, Thursday, September 14, 1989-Page 61
Tips on how to prepare a business loan application
By.;:;.. KEN KARMONA
TORONTO -
The secret to receiving the fmahcing"ybii heed rests largely oh how well your loan application satisfies your lender's requirements.
Poor presentation, inadequate preparation and un-certainlty-about the proper borrowing requirements are-common reasons given for rejecting business loan applications. While it is true that lenders, for the most part, have common
Intern
credit criteria, each may attach greater importance to oneor more of these criteria. It is therefore critical to present an application that is tailor-made to your lender.
When approaching a lender, you may find the following brdadbased proposal outline of some assistance. Following this general format will give the decision maker a sound understanding of your business and where it is headed. ' • The program
Describe what the
financing is for, detail the costs involved and be specific about the amount of your loan. For example, state the purpose of the loan and how much it will cost. Then outline the soijrces of funding including the working capital. • Operations
Be brief and focused, stating what your company does and why it is successful. Discuss concisely matters such as : business operations, sources of supply, market size, marketing strategies and the competition. A few well chosen
statistics and a clear understanding of your market and product positioning are of. greater value to the Lender than some broad-based philosophical statement of hope. ,• Management
This is a key area for the lender because it helps him establish the characteristics and capabilities of your company's management team. ThatTwhy it isTielp-ftil to provide brief resumes of key management people and shareholders. It may also be valuable to include personal net-worth state-
Bank Hapoalim to sponsor
seminar
TEL AVIV -
An international banking seminar for bankers representing 13 countries will be conducted here this fall by Bank Hapoalim, Israel's largest banking group.
The week-long global banking seminar will take-place in Tel Aviv from Oct. 28 to Nov. 6. Participants will include senior executives of major overseas banking institutions from the United States, United Kingdom, France, Italy. Belgium. Spain, Portugal, Finland and five other nations.
The overseas bankers
will meet with the heads of the Bank of Israel, the Tinance ministry, the Tel Aviv Stock Exchange, leading Israeli industrial corporations and major labor organizations, as well as with other government officials, members of the Knesset and the senior' management~^ aiid departmental managers of Bank Hapoalim.
The participants will receive a thorough briefing on the Israeli economy and contemporary business conditions in addition to an in-depth update on the on-
going operations and capabilities of the Israeli banking network in Israel and throughout the world.
The coniing international banking seminar is; the second such .session to be conducted under Bank Hapoalim auspices, and reflects the increasingly significant business relationship and strengthened cooperation between Bank Hapoalim and the world's leading overseas banking institutions. The initial conference, held in Tel Aviv last year, was an unqualified success.
loan proceeds from company earnings. Therefore, it is imp>ortant to include financial statements for the past few years and a forecast of at least one year. It is also advisable to empha-
ments in this section, depending on your lender's requirements
• Ability to repay
The lender will focus ort your ability to repay the
size to the lender the benefits this financing will bring to your company.
• Financial strength
Your financial statements demonstrate to the lender your firm's overall financial health, in particular its historical cash flow-and working capital positions. The statements are also indicators as to how your company will weather adverse economic changes, such as a slowdown in sales of your product or perhaps a new competitor that threatens^ to erode your market share.
Your financial statements and forecasts al^ indicate whether your working caipital position is sufficient to provide for expansion of existing sales levels. Security
Lenders are also interested in security. It is therefore advisable to proyide a section with a fiill description of the assets to be pledged as collateral.
If you follow this broad-based outline in preparing your business loan application, you will ultimately reduce the amount of time involved in securing a loan, and, more importantly, you • will clearly demonstrate to the lender that you have reviewed the reasons for borrowing and have supported your position with the appropriate factual information.
Take time to prepare your business loan applica-
tion properly — the-first time. After all, this document is your company's resume. When complete, make your presentation to the lender, remembering to be brief and realistic in your financial requests.
Keep in mind that lenders don't make money unless they grant loans; By presenting a complete, well •conceived business loan application that addresses your lender's requirements, chances arc he will stamp it Loan Approved.
Ken Karmona is assistant vice-president, district manager of Roynat Inc.
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