Better Business Management & Planning Practices

Boost Your Odds With a Lender
Focus on preparing your financials and resumes when seeking a loan.

Q: Are there any areas of a business plan that entrepreneurs should concentrate on in order to improve their chances of getting a loan?
- A couple of curious editors

A: Lenders are most concerned about getting their money back. Your business plan is just one of the tools that you can use to convince them that this can and will happen. The sections of your plan that a lender will focus on include those addressing historical performance, projected future performance, and management experience. (If you need help putting together an appropriate business plan, try using JIAN's BizPlanBuilder or Loan Builder software tools (www.jian.com). They are easy to use and recognizable to most lenders.)

First, they will look at the historical financial statements, comparing your performance to their own experience in lending to your industry. Then they'll analyze the projected revenues and expenses to make sure that they are reasonable and based on verifiable industry standards.

If the historical financials and projections are in order, the third � and often, the most scrutinized area of your business plan � is the one summarizing management experience. Lenders look very closely at how top managers have influenced a company's historical performance and how the continuation of their strategies may affect future performance.

Focusing on these three areas will not guarantee you a loan, but it will improve your chances of success. Remember that the bottom line for a lender is having proof that they will get their money back...with interest!

Doug Hood is a venture capitalist based in Atlanta.

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