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The
professional loan package is the vital link to the success of your
loan project. Your loan request
must begin with a loan request summary-just like the ones used on this
web site. Lenders
review loan documents endlessly.
They find some easy to follow and some go into file 13 in total
frustration. A loan package completed and well documented will win the
case with a lender just like a complete and well documented
presentation will win in court-if in fact you have a case!
A poorly documented case will probably be thrown out-both in
court and with a lender.
Of
all the loan packages you could submit-perhaps the most sophisticated
requirements will be found in the package you submit to the venture
capitalist. A commercial
loan package should follow the same steps with adjustments as
necessary. Following are
guidelines for a loan package content to a venture capitalist, which
has been well received by many;
(A) NARRATIVE CONTENT
l.
Title Page
2.
Loan Brief
3.
Loan request summary including use of funds
4.
Company and/or personal background
5.
Product description
6.
Target market
7.
Marketing Plan
8.
Promotion and publicity plan
9.
Competition summary
10.
Product source and/or manufacturing plan
11.
Management background
12.
Major company and/or personal achievements
13.
Financial risks and alternatives
14.
Financial pro-forma showing profit potential and growth for
five years.
(B) EXHIBITS
1. Management
resumes
2. Major
clients and/or client potential with references if available
3. Product
literature
4. Market
and feasibility studies
5. Publicity
and product reviews
6. Industry
literature
7. Other
exhibits of interest
(C) FINANCIAL AND DATA DOCUMENTATION
1. Current
business and personal financial statements
2. Current
P& L statements
3. Legal
documents & permits as project requires
(D) DOCUMENTATION IF REAL ESTATE IS INVOLVED
1. Current
appraisal
2.
On site photos-preferably aerial
3. Title
binder
4. Insurance
coverage (copies)
5. Property
tax statement (annual)
6. Mortgage
verifications (existing)
7. Current
survey
8. Architects
plans and builder estimates
9. Contractor
resume
10.
Performance bond on contractor
11.
Building and zoning permit
12.
Summary of improvements
Depending
upon your loan project, these items should be neatly stacked in order
in an attractive cover or loose-leaf binder with tab dividers for easy
reference. A copy package
could be submitted if clean and legible-but an original is best.
Always keep an exact copy-just as you have submitted to the
lender for handy reference in any future discussions.
The
narratives should not be to long or to short-don't ramble.
Stay precise and to the point in all narratives.
Keep in mind your loan package is your introduction to the
lender and may determine if you ever reach the point of a personal
interview.
The
preparation of a complete and attractive loan package may take more
time but it will save you time in the long term and may save your loan
project!
WHEN
YOU ARE TURNED DOWN
When
you are turned down, that is only the beginning.
Now you can find out what you need to do to get your loan
project approved. Try to
find out exactly why your package was turned down.
If your turn down was by a venture capitalist, you just move on
to the next one-try to stay with those interested in your field or
type of project. If your
turn down was by a commercial lender, you may be able to restructure
your request if you can get the exact reason for turn down-and then
resubmit to the same lender. If
not, then at least take advantage of the reason for decline of your
loan request and build upon that for your next lender.
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