{"id":1580,"date":"2010-06-13T09:52:58","date_gmt":"2010-06-13T15:52:58","guid":{"rendered":"http:\/\/www.financenewmexico.org\/articles\/?p=1580"},"modified":"2013-06-24T11:21:01","modified_gmt":"2013-06-24T17:21:01","slug":"clear-business-plan-is-key-to-getting-a-loan","status":"publish","type":"post","link":"https:\/\/financenewmexico.org\/sandbox\/articles\/obtaining-a-loan\/clear-business-plan-is-key-to-getting-a-loan\/","title":{"rendered":"Clear Business Plan is Key to Getting a Loan"},"content":{"rendered":"
\"Marci

Marci Rulon, CEO, Southwest Federal Credit Union<\/p><\/div>\n

Whether an entrepreneur is starting a new business or expanding an existing venture, applying for a loan can be daunting.\u00a0A good business plan makes the process less intimidating and more likely to succeed.<\/p>\n

In writing a business plan, the business owner should consider her business from the lender\u2019s perspective and demonstrate why she is a good credit risk.\u00a0 The business plan should include the following sections:<\/p>\n

Executive summary: This one- or two-page narrative appears first but is written last \u2013 after the owner has prepared the other components. The summary highlights the plan\u2019s contents and explains why the loan is needed.<\/p>\n

The company: This is the place to describe the legal status of the company and its history.\u00a0 If it\u2019s a new company, it should reveal the company\u2019s startup plans and any collateral needed to secure the loan.<\/p>\n

The market: A lender wants to know that a business owner has a clearly defined market that\u2019s big enough to make the business profitable.\u00a0 The borrower needs to know his customers \u2013 what they need, where they are and how to reach them.<\/p>\n

Product or service: The entrepreneur must explain to the lender what she\u2019s selling and how the product or service will benefit customers.\u00a0 The lender wants to know why the borrower\u2019s product or service is better than the competition\u2019s. The borrower must show an ability to control the delivery and quality of the product or service.<\/p>\n

Management team: The business owner\u2019s personal qualities and character and the management team\u2019s skill and expertise matter to a lender. The owner should describe his personal investment in the company \u2013 both in \u201csweat equity\u201d and money.<\/p>\n

Company strategy: Here\u2019s where to outline specific plans to build and expand the business and to project a budget for the next one to five years. If it\u2019s a new business, the lender wants to see well-prepared, realistic strategies for building the venture from the ground up.<\/p>\n

Financial section: The lender will closely evaluate the company\u2019s most recent asset\/liability and income\/expense statements and especially the projected profit and losses statements and cash flow tables. These reports show the lender whether the borrower has enough resources to handle the loan payments. (Some lenders want to review the business owner\u2019s personal finances and see two years of the company\u2019s tax returns. These don\u2019t need to be part of the business plan, but borrowers should be prepared to provide them if the lender asks for them.)<\/p>\n

For help in preparing a business plan, a business owner can visit one of the 20 local Small Business Development Centers around the state. For the nearest office, visit www.nmsbdc.org<\/a>.<\/p>\n

Learn more about the New Mexico Small Business Development Centers<\/strong><\/span><\/a>.<\/p>\n

Article 141<\/p>\n

Download 141_Clear Business Plan is Key to Getting Loan PDF<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Whether an entrepreneur is starting a new business or expanding an existing venture, applying for a loan can be daunting. A good business plan makes the process less intimidating and more likely to succeed. Continue reading →<\/span><\/a><\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[6],"tags":[],"_links":{"self":[{"href":"https:\/\/financenewmexico.org\/sandbox\/wp-json\/wp\/v2\/posts\/1580"}],"collection":[{"href":"https:\/\/financenewmexico.org\/sandbox\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/financenewmexico.org\/sandbox\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/financenewmexico.org\/sandbox\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/financenewmexico.org\/sandbox\/wp-json\/wp\/v2\/comments?post=1580"}],"version-history":[{"count":7,"href":"https:\/\/financenewmexico.org\/sandbox\/wp-json\/wp\/v2\/posts\/1580\/revisions"}],"predecessor-version":[{"id":1586,"href":"https:\/\/financenewmexico.org\/sandbox\/wp-json\/wp\/v2\/posts\/1580\/revisions\/1586"}],"wp:attachment":[{"href":"https:\/\/financenewmexico.org\/sandbox\/wp-json\/wp\/v2\/media?parent=1580"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/financenewmexico.org\/sandbox\/wp-json\/wp\/v2\/categories?post=1580"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/financenewmexico.org\/sandbox\/wp-json\/wp\/v2\/tags?post=1580"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}