Getting a Loan for Your Hudson Valley Business

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Here in the Hudson Valley (and most other places around the country), money is often one of the biggest obstacles to people that wish to start their own Hudson Valley business.  The ideas of a new product or service that seem almost like a sure thing are hindered by the lack of capital to put things in motion.  For this reason many people look for loans in order to get their idea off the ground.  Approaching a bank or any lending institution with a solid plan can make all the difference in getting your loan approved.

Your Hudson Valley Business Blueprint

There are numerous books covering the subject of preparing a well designed business plan.  This is the first thing that the loan officer will review.  They will want to see what kind of business you plan to start, the goods and services that will be offered, the structure of the business, plans for developing a base of clients, how you will obtain the goods for sale and much more.  If you are unsure about how to prepare this type of plan you can hire a professional who can walk you through the process and prepare a plan for you.

Requesting the Loan

After you have finished the business plan you can apply for the loan.  The lender will ask that you complete a loan proposal.  This information will cover several areas.

  • General information about you, including experience
  • The amount of the loan
  • How the funds will be used for your business
  • Your proposed schedule for repaying the loan
  • A backup plan in case your initial strategy does not work

Fulfilling the Application Form

Most lenders will ask that a prospective new business complete a full application.  This is a form that is a requirement for the lender’s bookkeeping purposes.  In the event that the lender is audited and a question arises about a loan offered to you, the lender will need to offer proof that the loan was processed in a similar manner to all other loan applications.

It is important that all questions on the application are answered completely.  Provide any explanatory details to help clarify items in your past or information on your credit that may cause concern from the lender.  A truthful and upfront account will go a long ways towards proving your character with the lender.

Financial Records

For people that are starting a brand new business, a good rule of thumb is to approach the lender with your personal bank records from the most recent 24 months as well as the last two tax returns that you have filed.  This will demonstrate to the lender your financial responsibility and reliability.

If you have an existing company, you should include the records mentioned above plus the last two tax returns for the actual company.  Having all of this data organized and ready to go will make the process much easier on the lender.  The tax return will prove to the lender that the company is currently operating at a profit.  The personal records will show that you are the beneficiary of the company’s profits.

Personal Resume

Although not usually a requirement for a business loan, it can be a real boost to your overall presentation if you provide a detailed resume.  This can be especially helpful if you have considerable experience working in a certain industry and you have made the choice to start a new company in that same industry.  Along with your experience your resume can also show your accomplishments in various areas whether it is sales, management or any other business associated task.

Just like the Boy Scouts say, “Always Be Prepared.”  The more preparation you put into your loan application the better off you will be.

  • Have all of your documents in an easy to understand order and nicely organized.
  • Respond quickly to any request for more information or clarification of data.
  • Dress like the successful person you wish to be.
  • Do not spend a lot of time or effort worrying about a misplaced document or a forgotten item.  Explain that you will locate the necessary item and forward to the lender either by fax, email, or in person.

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