You want to start a business; however, you need financing. In hopes of getting the capital needed for your business, you have to present the loan officer or banker a financing proposal. A financial proposal is essentially a document that details information about your business. In other words, it is a marketing tool, for the aim of presenting a financing proposal is to prove to the loan officer or banker that your business is credit worthy or rather capable of repaying the loan. Below are the steps you need to take to create a financing proposal.
Instructions
1. Establish some type of rapport with the loan officer or banker prior to submitting your financial proposal. Schedule a meeting with him or her.
2. Include a one page cover letter. You can include in your cover letter an introduction of your business. Additionally, thank him or her for meeting with you prior to the submission of your financing proposal. You should end the cover letter thanking the recipient for his or her consideration.
3. Include Table of Contents.
4. Summarize your financing request. Some questions to answer are:
A). How much do you need to borrow?
B). Why do you want to borrow this amount?
C). How are you expecting to re-pay the money?
D). In what time frame do you expect to repay the money?
E). Do you have any collateral?
5. Include your business plan. Sections of your business plan that should be included are:
A). Executive Summary
B). General Description of Business
1). Personal Information
2). Personal Financial Capability Statement
C). Business Concept
1). Statement of Purpose (Mission Statement)
D). Description of Products
1). Features of Proposed Products / Services & Benefits to Customers
2). Proprietary Aspects of Products/ Services
3). Stage of Development/ Production Plan
4). Future Products/Services
E. Management Structure and Organization
1). Personal Profile of Skills & Experience
2). Legal Form and Ownership
3). Management and Personnel
4). Outside Services/ Advisors
5). Risk Management
F. The Marketing Plan
1). Industry Description
2). Background of the Industry
3). Current and Future Trends
4). Business "Fit" in the Industry
5). Geographic Boundaries of Market
6). Analyzing Competitors
G. The Financial Plan
1). Pro Forma Income Statement
2). Monthly Cash Flow Projections (Attached)
