Time for Your Business to go Bank Shopping: Part Two
Recent news shows that banks have turned the corner and are beginning to show solid profit gains. What this means for businesses is that over the next year, banks will not only begin to lend but will start actively looking for companies to bring over from competitors. I am not seeing a significant lowering of rates and terms yet but my connections are now actively checking in with me to see what’s in my pipeline. Good news for the small to midsize companies for whom I help find funding!
Last week I gave some tips on how to put together the executive summary for your company’s loan request. Today you’ll get some tips on how to put together the next portion of your loan package, the Company Information section. This section tells the complete story of your company and consists of several parts.
First, will be a discussion of the company’s history. Who started it? When? Why? What’s special about it? Often companies already have this on their website- I always suggest plagiarizing this part if you’ve already got it available. Be thorough, talk about how the company has changed over time, but don’t cover more than 3-4 paragraphs.
Second, talk about the company today. What has happened in the current year to impact the company, have there been issues, layoffs, hiring, restructuring? From there discuss who are your top five to ten clients, what percentage of revenue do they bring in and what are the current prospects regarding increasing/decreasing sales to those clients. Next, discuss who are the top five competitors and what is the company doing to make sure these competitors don’t take market share- in other words what is the company doing to differentiate itself from its competition.
Third, talk about the company in the future. What are the plans for 1, 3, 5 years in the future? This may be in line with your loan request if you are borrowing for acquisition or purchase of tangible assets for organic growth. What do you see as the possible hurdles for your company and your industry going forward? Are there any tangible or intangible risks that you, as an expert in your industry, see that the lender should know and how do you plan to mitigate those risks? Do not put in every possible thing that could go wrong but acknowledge and mitigate 3 or 4- this will create an air of competence that will give the lender added incentive to work with you.
Depending upon the amount of information you have this portion of the package can be a couple pages to several pages. I am giving you the basics here but there are many other items you can add depending upon your industry to give added value to the lender that is looking at it.
Next week I’ll discuss the financial performance section of the write up. For most of us this will be the most difficult section, especially due to the recession’s impact on everyone’s bottom line. If you have more questions or are already thinking that this may be too much work for you to add into your day, please consider using my services instead of doing it yourself. Contact me at michelleg@bizloanlink.com.
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