Expansion-Restructuring
Data Generally Needed For Lenders

  1. Summary of business operations (Business Plan or History of Business)
  2. Describe the experience and management capabilities of the owners and/or managers
  3. Amount of loan to be requested and breakdown of how it will be spent. Describe benefit to the business
  4. Current business balance sheet and income statement within 60 days
  5. Aging of accounts receivable and payable as of same date as current statement
  6. Schedule of notes payable as of same date as current statement 
  7. Balance sheet and income statement for past three years 
  8. If the business is a corporation or partnership, copy of the complete corporate and partnership income tax return for the past three years. If the business is a proprietorship, copy of the complete individual income tax return for the past three years. The tax returns will be verified with IRS. YOU MUST BE ABLE TO RECONCILE CAPITAL/ RETAINED EARNINGS WITH PRIOR YEAR FINANCIAL STATEMENTS AND TAX RETURNS. 
  9. Personal financial statement and cash flow within 60 days for all owners of 20% or more and guarantors
  10. Copy of complete individual tax return for the past three years for all owners of 20% or more and guarantors
  11. Satisfactory credit. Provide written explanation of derogatory items
  12. Copy of entity documents
  13. Copy of lease, including options, for term of the loan 
  14. If historical cash flow is not sufficient to service present and proposed debt with a 25% cushion, provide projected profit and loss statement, balance sheet, and cash flow monthly for next twelve month period and then annually for following twelve month period. Provide written assumptions supporting projected sales and expenses. 
  15. Fill out lender's application forms completely.

    Greatest Problems 

    1. Equity in Business - Generally the size of the proposed loan that can be added to other business debt will depend on the tangible net worth of the business. The loan amount will depend on industry risk and lender's policy. Some types of business require a higher investment, i.e., restaurants (high build out cost and failure rate) and service business (low collateral).

    2. Collateral - Dollar amount of collateral on a liquidation basis should be equal to or greater than the amount of the loan. The business owner may pledge personal assets as collateral, i.e., CD's, stocks, real estate, note receivable. Homestead or retirement accounts cannot be pledged.

    3. Repayment Ability - Cash flow analysis by month must show ability to repay the loan at the initial interest rate and at higher rates (most loans are floating rate).

    4. Management Ability - Business owner must show the ability to operate the business profitability.

    5. Credit - The business owner must have satisfactory credit.