How to prepare to pitch to a bank for a commercial loan?
There are key points to understand when asking a bank for a commercial loan. You’ll need to prove that you have a plan, provide specific financial information, persuade them that you are competent, and spark their interest in investing. Here are some essential materials you need to prepare for a meeting about a commercial loan.
There are many ways to create a business plan. The most crucial elements to convey to a funder are:
The Opportunity – Describe the need you are addressing and calculate the size of the market. Demonstrate through research that the opportunity exists.
The Resources – Determine what you need compared to the assets you already possess.
The Business Model – demonstrate how you’ll capitalize on the opportunity
Financials – Show creditors you’re well prepared with a thorough budget that accounts for unforeseen expenses. Make a balance sheet if the company has assets or owes money. Lenders and investors want to know whether you have invested your own money in the business and what value already exists. Indicate how and when your company will be profitable. Describe how much you plan to take as a salary or wage from the company and whether you have any other sources of funding on hand.
The Payment Schedule – You must demonstrate to the lenders your value to them. Include interest when demonstrating how repayments fit into your spending plan. Show a schedule of when dividends can be anticipated (or an increased share price).