Many people have been asking for guidance on how to get instant business loans to start small franchises. Their plight has been due to a mere lack of enough information patched up together coherently. Every bank and other credit companies have their unique loan requirements. However, some papers are a must across all loan providers. Therefore, if you desire to apply for a loan from any lender, especially banks, you must prepare some essential documents.
1. Loan Application Forms
The loan request is like job application and any other official requests. They demand official communication put down in writing. Many banks, big and small acknowledge that providing credit is their core business and have put in considerable effort in making their loan application easy for clients to maneuver through and for stuff to review. That said, a good number of banks offer online platforms where one can fill in their applications. Some banks do not have this facility, and you have to fill in the application forms manually. Banks are severely thorough in reviewing applications so take care not to:
• Complete any wrong information
Your application will be flagged as insincere or fraudulent, and your details will be circulated to other banks
• Apply in multiple institutions
Every creditor you apply a loan for will find out which other creditors you have approached. You will come off as desperate if you apply in several banks. Your intentions may also be misunderstood, and lenders might think you are trying to score double credit for the same collateral. Choose the creditor with the best terms and conditions and stick with them
2. Personal Information
When you ask for a loan, you put yourself on trial from your possible creditors. They demand to know all your details so they can determine your ability and willingness to pay any loans awarded. They will need you to state:
1. Personal background including education and marital status
2. Contact information
3. Area of residence
4. Educational level
7. Criminal records if any
Any information provided that surfaces as incorrect will disqualify you for the loan and probably get you in legal trouble.
3. Business Plan
The business plan is indeed the most crucial requirement any bank will ever demand to award any small business loans. A business plan is a text that details all the specifics of business from its expenses, target market, service and good production to how the business product is peached and sold. The document should in a coherent and systematic fashion explain the current position of the firm and the projected position after the loan. It should have within it:
• An executive summary
This segment should feature a brief explanation of the business, how it operates, its marketing strategies, its goals and how its revenue is utilized. The summary is often the soul of the whole business plan and should, therefore, be concise enough to convince lenders to fund the business.
• What the business does to earn its profit
• The market structure and competition situation. Please do not be subjective in your analysis of the competition.
• How the business plans to market and distribute its products, whether goods or services. In this segment, exhaustively discuss all your strategies in maximizing your sales. What tools and gimmicks will your enterprise employ to create awareness of and bias for your goods and services?
• Financial breakdown. Let the math do the talking in this segment. Embed balance sheets, profit and loss statements, cash flow statements and any other documents highlighting the financial circumstance and policy of the business.
• Investment Information