To be able to thrive and grow your business you need cash. Often, at some point, you will need more money than you have available in your accounts. For example, you may want to extend your premises to take on new customers.
But understandably you will not want to wait the decade it would take to make enough profits to be able to afford to do so. If you did that your business would grow very slowly indeed. That is why most firms borrow money at some stage. But, for your loan application to succeed, you need to put together a strong argument. Usually, potential lenders will ask you to do so in the form of a business plan.
Below, we provide you with some tips to help you to do that effectively. Whether you simply want some help writing a conclusion or putting together your appendices this article will be useful.
Answer the right questions
The purpose of your business plan is to provide potential lenders with the information they need to make an informed decision. Basically, you are providing answers to any questions they may have. You are also anticipating and addressing their doubts.
This excellent article lists what those questions are likely to be and provides you with a summary of what you need to do to answer each one in full. You mustn’t miss any of them. You have to bear in mind, that your business plan is the only chance you will get to persuade potential lenders. So, it has to be right.
Use a business plan template
When you sit down to write your first business plan the chances are that you will feel overwhelmed. Knowing where to start can be very tricky. Having a template to work from will help you to overcome this issue.
The right one will provide you with the basic structure enabling you to recognize what type of information you will need to include. This is a very easy to follow template that you can use to make life a lot easier for you.
When you put together your business plan be truthful. Most potential investors are very savvy, they can easily spot an applicant that is not being honest. Plus, even if something slips by them, later when you have to produce the necessary evidence to complete the loan contract, you won’t be able to do so.
Provide plenty of evidence
In fact, it is wise to back up whatever you are saying with as much evidence as possible. Including tables, graphs and data in other formats is important. But, most of it should go into the appendix section.
The concluding paragraph of your business plan should be strong but concise. It should briefly layout the opportunity you are trying to exploit. Then summarize how much money you need to borrow. Your concluding paragraph is there to convince the investor you are a good risk, so also mention the assets you will be used as collateral.