There are several parts that need to be put together before you set an appointment with a lender. The bank wants to help you but it is up to you to let them know why they should. The goal of the presentation is to show that you have the ability to repay a loan. The lender will be looking for a company that is organized, has planned how to repay the loan, and does not have a history of defaulting on obligations. It takes time to put together all the information needed for a bank presentation but the extra effort will go a long way towards getting approved. The key thing to remember is that the lender is looking for errors and inconsistencies. You will want to check and recheck to make sure that you are not giving them a reason to decline your request.
The sections that you will need are:
Cover Letter: The presentation package should have a cover letter that introduces the company and what is in the package. List the attachments enclosed and current contact information such as mailing address, phone number, and email.
Main Text: The text should highlight the following points:
Personal Financial Statements: This is usually a form that is provided by the bank. It has several sections and can take some time to fill out. Insure that you take the time to complete all sections. If care is not taken when completing the personal financial statement the bank will see this as a lack of attention to detail and decide against granting a loan. Also, remember that the values on the personal financial statement and the tax returns must match.
Company Financials Pro Forma: A pro forma is a projection of what is expected to happen during the next five years. You should provide the information on a monthly bases for the first year and on an annual bases for the full five years.
Company Historical Financials: Provide the Balance Sheet and P & L statement for year end. Have last year ready and give it to them if they ask for it. It is preferred that you provide your accountants statements if available. These will be used to compare against the proforma to see if your plan is realistic. For example, if sales in the past has been at 2 million and the five year proforma says sales are going to be 20 million, the lender will question the validity of the proforma and the ability to repay the loan. If the ability to repay the load is in question the lender may not approve the request.
Personal and Business Tax Returns: When possible provide the last three years. These will be compared to the company historical and personal financial to see if they match. If they do not this could cause the loan to be denied.
A/R A/P Ageing Summaries: Provide an ageing report for both Accounts Payables and Accounts Receivable. This will show your history of paying your bills and how well you are at colleting from your customers. The lender wants to know if you will pay him back and how you deal with people that do not pay their bills. Make sure that it is as current as possible and that it has been cleaned up. Print this the day before the meeting and review before adding it to the packet.
Review of the Packet: You will want someone to read what you have put together. Have them look for spelling and grammar errors. Make sure that all packets are the same for all lenders if meeting with more then one. Plan to have everything ready at lest a day ahead of time. Sleep on it and complete one last check the morning of the appointment.