Give your prospective lender a detailed package of information to help speed up the process of getting the loan and make a great impression in the process. While each loan will be slightly different, the following key will help you prepare the essentials.
For an asset-based line of credit, provide at least the following:
• 3 years of year-end financial statements, current year-to-date internally produced financial statements
• Current aged listing of receivables, current inventory report and if it can be aged, an aged inventory report, aged payables list
• Resumes of the management/officers, current and updated personal financial statements of the guarantors and a huge winner, a budget and cash flow – and please do NOT suggest to the lender that in YOUR business it is impossible to budget! Remember, budgets are essentially estimates and everyone can make an estimate – that way you can have something to measure your performance against and give you a great indicator of what you need to do to be a success.
Above all, as you prepare this package, be realistic about the value of your investment and assets. Ridiculous valuations of the investment in the business on the guarantors’ personal financial statements are unimpressive to a lender.