qprev_HBB Manual 2.qxd - Small Business BC

3. Wear their shoes – Every investor wants toknow clearly how much is in it for them –offer excitement as well as re-payment.4. Research and listen – Bone up on banker’slingo and what lending programs areavailable. Talk their language.5. Ask for the business – Know exactly howmuch you want and what exactly it will beused for. Don’t ask for the moon.6. Be truthful – Just like you would be to thetax auditor.Evaluate What You DiscoverYou may be told that policies are not rigid, thatevery case is different, that without moreinformation your question can’t be answered orpossibilities assessed. Don’t let this put you off.Such answers don’t mean your visit was a wasteof time. You will have an improved sense of thepeople at each institution, and you’ll be able tocompare information you get from differentlenders.If your sources of income are yourself, familyand friends, use the information you get byresearching financial options to get an accuratefeel for the marketplace. Influenced as it is byinterest rates, time spent researching finances isworth the gains in experience and understandingof the business world.Seek Professional AdviceIf you can only afford professional advice onselected aspects of your business, make financingone of them – especially if you plan to borrowmoney. Use your research skills to get as muchinformation as you can. Prepare to get the mostout of professional advice by being able to askexactly what you need to know.Bring a Financing Proposal PackageIf you decide you need a loan, your financial planmoves to center stage. That part of your businessplan is explained in detail below. Make sure youare familiar with every part of it. From thecomplete Financial Plan create an outline ofyour financing needs, before you go to a lenderwith a proposal or application for a loan. Thinkof this as a financial proposal package that helpsyou go prepared with the following key points ofinformation shown separately:• The specific loan and term being requested.• What it will be used to purchase – such ascapital assets like machinery and equipment;fixed assets such as a building; homerenovations, vehicles or inventory.• Your amount of equity in the business, andinvestments by partners, friends or relatives(ownership indicates commitment).• Cash flow forecasts to detail the amount andtiming of cash use.• Contact names, addresses and telephonenumbers for the lending institutions andprofessionals you deal with (accountant,lawyer, bookkeeper, business advisor, etc.)• A personal net worth statement (assets vs.debts) to support a personal guarantee.• Copies of letters of intent, commitments andpotential orders.• Photocopies of your insurance policies, legalagreements and appraisals.• Copies of price lists to support cost and salesestimates (Note: always put wholesale andretail prices on separate pages).• Any appraisal of fixed assets (such as propertyand buildings).74solutions for small business home-based business