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The process of applying for a business loan is a stringent one as compared to the standard procedures in obtaining a home mortgage loan or a personal loan. This is probably due to the fact that business loans contain a greater risk element as compared to other loans. Therefore, lenders need to exercise greater caution and emphasis when evaluating business loan applications in order to minimize their risk exposure.

With that, lenders evaluate their applicants based on the information that are provided as well as their judgment of the viability and profitability of the business being financed. Thus, business loan applicants will be required to submit a loan proposal along with their applications with the purpose of creating a positive impression upon the lender.

The first element of a loan proposal is an executive summary, providing short descriptions of the type of business and the industry, the purpose and usage of the loan, the proposed repayment conditions as well as the intended loan period. After that, the company information is provided, enriching the reader with the nature of the business, the location of the business, company history, the products or services provided, key differentiation factors of the company or the product, the general growth of the industry, competitive information, growth potential and target customers.

It would help if you could include your company marketing strategy, detailed product information, historical information as well as projected growth plans for the company. Apart from that, if you plan to incorporate product or service extensions in the future, you should provide these descriptions within your loan proposal. If possible, geographical expansion plans will help in the proposal.

The next area that needs to be showcased in the proposal would be the credentials and experience of each member of the management team. Impressive credentials will provide assurance to the lender that the company is managed by individuals who are responsible and capable. This is important as having the wrong people managing the company could be detrimental for the business.

In any loan application, historical records are essential to be used in evaluating the performance of a company. As new companies do not yet have these records, the financial records of the owners will be used as the basis of evaluation. Income tax returns forms are also required by lenders. All of these records provided should be the latest copies less than 90 days old, with the exception of the income tax returns form.

If the loan is applied for an existing company in active operations, company financial statements, including profit and loss accounts, balance sheets and the net worth reconciliation record should be included in the loan proposal. Again, all of this information should also be the latest and less than 90 days old. Additionally, a listing of accounts receivables and other short term and long term debt should be attached.

On the other hand, if the loan application is submitted for a new business, a pro-forma balance sheet and profit and loss account should be provided. Apart from that, a cash flow projection for the upcoming year is drafted to indicate the possibility of recovering the debt. This also means that projected revenue, profits, costs incurred and expenditure should be listed out with definite explanations provided as well as a list of assumptions.

If you possess assets that you wish to use as collateral for your loan, details for this should be provided to the lender as well. It is often common for lenders to request for dual sources of repayment in the event that one source is defaulted. This means that if the business owner defaults on his repayments, the collateral can be sold in order to recover debt.

Finally, other documents normally required for a loan application would be items like the article of incorporation, lease agreements, partnership agreements, license, references, etc. As the list of required documentation, information and attachments differs between lenders, it is best to check with the individual lender on their specific information and documents required to be attached with the loan proposal.

A good entrepreneur knows that the essence of striking gold in business is finding the right opportunity and going after it despite the risks. These opportunities keep on sprouting when you are doing business. Or you might have stumbled upon one and contemplating taking it. Your financial condition may not help you to translate your potential for financial success and independence. Business loans can facilitate this translation.

Obtaining finance is central for starting a new business or making business grow. Financing a business through business loans can be a formidable task. But a good preparation can easily sort out any matter detrimental to getting your business loans approved. Taking a loan for business is an important decision. A business loans borrower must understand that while taking loans can help a business grow, a wrong decision will mean debt and actually damage financial stability of a business. Determine how much loan amount you require as business loans. There are different business loans products to decide from.

A well thought out business plan is the most significant part of getting a business loans approved. The business plan should have projection. Don’t go into details, a concise to the point executive summary which answers all the queries of a business loans, will gain easy acceptance. If you have an established business – financial statement, cash flow for the past three years will be required.

When business loans application is reviewed, some of the following questions might come up in one version or the other.
• How much loan do you require?
• What about business profits, does it have enough cash flow, to service the debt?
• Is there collateral to cover the loan?
• Is there a reasonable balance between debt and equity?
Business loans lender would pay much emphasis on your repayment ability. He would like to know if you have invested your own money in the business. He would not be very interested in taking risk in a venture where the business owner has not.
For business loans it is important to know your credit history. The business loans lender will undeniably go through your credit history. Go through your recent credit history and find out faults and recent credit discrepancies. If there are inconsistencies, get them removed. A credit history that is questionable will most likely not get business loans. However, if you attach a letter explaining your credit conduct can evoke a favourable response. The worst mistake will be to hiding your faults. This will most certainly reject an otherwise encouraging business loans application.
Few people realize it but locating a good business loans lender is integral to finding business loans. It is not easy to find business loans lender that abides by your needs. In fact it is an investment in itself. Look for business loans lender who is willing to work with you and for you.
Business loans also depend on your character and your ability to be present yourself, your business details and your confidence. They also count in getting your business loans accepted. In case business loans application is rejected – make sure you know the reason why this happened. This will enable you to rectify mistakes next time you make attempt to get business loans.
Collateral is chief ingredient for business loans. Secured business loans will require collateral and greatly add to the business loans application. Business loans without collateral are unsecured business loans. They are usually difficult to find. But unsecured business loans will only satisfy small financing needs.
Business loans are available for most financing needs. Business loans can be used for starting a business, refinancing, expanding your business, purchase of equipments or any other commercial investment. Insufficient business funds are one of the leading causes of business failure.

Business loans can be defined as money lent for a specified amount of time at a specific interest rate to a specific person or people that operate a business or plan to operate a business. This definition is very broad, but so are the various types of loans available to business people. Deciding on which type of business loan that you and your company will benefit from the most is very important. Often times, a start-up business or someone that has never owned a business will find themselves more or less applying for a “personal” loan. This can be a very risky endeavor, mixing business loans with personal loans, however, often times it is the only available means for first time business owners.

One of the first things personal business owners need to do is establish business credit. Business credit can help you get a business only loan without using your personal credit. Establishing business credit can be done by:

1.) Opening up a business credit card account and paying it in full.

2.) Buying equipment and supplies from companies that will report good standing to the business credit bureaus.

3.) Having a good business plan with potential earnings, letters of intent, and any type of customer contracts already laid out.

All of these types of endeavors can help in receiving a business loan. Often times, financial institutions require in-depth business plans, be prepared to spend days working on just the certification paperwork prior to applying for a business loan. A business only loan can be obtained in the business name without use of personal credit as long as the business can justify the loan amount and the ability to pay it back.

There are several different types of business loans available, ranging from those secured with collateral, non-secure loans, which are based upon the credit worthiness of the applicant, and even government loans for small business ventures, women and minorities. Government loans are those loans secured by the government; in most instances these loans are available when the business or owner can prove that the community will prosper based upon the business at hand. For the most part, government loans are based upon personal credit.

The basis for which you may need or require a business loan may vary. Some of the most common business loans available to business owners are:

• Acquisitions or a loan to acquire an existing business
• Inventory loans
• Account Receivable Loans
• Working Capital Loans which converts a companies assets into working capital
• Equipment Leasing
• Commercial Property loans
• Warehouse financing
• International business loans
• Franchise loans

One of the most important tools when deciding on what type of business loan your company needs is research. Researching the different types of loans available to you and your company can save you money. First, look into the different type of business loans available to you in your state. Many states have government loans available; some even offer grants, which is money available for specific purposes that do not require repayment. Research the different type of Federal loans available. You can do this at the following website: www.sba.gov. Call your local bank and investment companies regarding the business loans they have available for you. Many times, business loans are not that hard to acquire. With research and a good business plan, your dreams may come true.

Filed under: Green Culture, Chrysler, Ford, GM, Legislation and Policy, Green Daily, USA

The plan to drive a slew of Detroit’s best new cars from the Motor City to Washington, DC is over before it even got started. Amazingly, there was just too much support for the idea, which led to a complete lack of control over the event and leading to its cancellation. It’s just as well, really. While it would have been an awesome display of support for the ailing Detroit 3, the notion of packing Washington’s already busy streets with a few hundred more vehicles, not to mention their occupants, would have been a complete nightmare. Even worse, the plan was to show how fuel efficient vehicles from America can be, but the proposal would have equaled the burning of hundreds of gallons of gasoline, which doesn’t exactly strike us as particularly green.

The event’s organizers, made up of suppliers, dealerships and Union officials, have instead started a new website called TheEngineOfDemocracy.com. At the site, individuals will be able to show their support for Detroit’s automakers in a peaceful and hopefully meaningful way. One delegate from each of the 50 states plus one from DC will make the trek to show their support in person.

[Source: The Detroit News]

Motown to Washington caravan a bust originally appeared on AutoblogGreen on Sat, 29 Nov 2008 19:53:00 EST. Please see our terms for use of feeds.

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Filed under: EV/Plug-in, Hybrid, Ford, LA Auto Show

Following the reveal of the Ford Fusion Hybrid at the Los Angeles Auto show last week, Ford’s director of sustainable mobility technology Nancy Gioia spoke with Green Fuels Forecast about a number of topics. Top of the list, of course, was the new hybrid sedan and the fact that Ford has decided not to make its hybrids more visually distinct from conventional cars. The Fusion is just the latest of Ford’s hybrid programs, but the most advanced is the plug-in hybrid Escape that Ford is testing with Southern California Edison. That program is apparently going very well and in fact Ford will be announcing soon that several more electric utilities are joining the test program. So far the Escape PHEV is averaging 120 mpg running in charge-depleting mode and 70 mpg overall. Gioia also discussed battery exchange programs. She told GFF that while battery technology is still changing so quickly, such systems may not prove to be technically viable. Check out all of what Gioia had to say at Green Fuels Forecast.

[Source: Green Fuels Forecast]

Nancy Gioia discusses hybrids, plug-ins and battery leases originally appeared on AutoblogGreen on Sat, 29 Nov 2008 17:31:00 EST. Please see our terms for use of feeds.

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