Whether you are applying for a microloan, SBA guaranteed loan or a traditional bank loan, similar information is required to complete a loan package. The following list provides a checklist of most requirements for a loan package.

Personal Financial Information:

Personal Financial Statements (signed and dated)

Copies of Personal Tax Returns (including all schedules for 3 years)
Source/Amount of Owner’s capital injection Credit Report for owners of 20% or more, (dated within 90 days with all derogatories explained.)
Resumes from Principals, Partners or Proprietors
Financial/Business Information:
Business Plan
Description/History of the Business
Benefits from the loan
Articles of Incorporation or Assumed Name Certificate

Credit Report for the business and owners of 20% or more (dated within 90 days with all derogatories explained.)
Cash Flow Projections (For one year by month. Second and third years may be done by quarters.)
Projected Profit and Loss (For one year by month. Second and third years may be done by quarters.)
Notes to Financial Projections (Assumptions)
Balance Sheet and Profit & Loss Statement (For the interim period dated within 90 days, each page signed/dated. Start-ups should include opening balance.)
Balance Sheet and Profit & Loss Statement (For last 3 years, each signed and dated.)
Copies of Business Income Tax Returns (for 3 years)
Copy of Existing Facility Lease (s)and/or Lease(s) to be acquired
Schedule of All Business Term Debt (Notes, Contract & Leases Payable)

Aged Accounts Receivable

Collateral Requirements:
Schedule of Fixed Assets to be acquired with loan and their cost.
Appraisal on real estate and most recent Tax Appraisal.
Franchise:
Franchise Agreement and FTC Disclosure Report* Construction, Including Leasehold Improvements:Construction Contract* by the contractor, architect, or other, with “turn-key” firm cost quotation. Copy of performance bond*

Additional Information:

Partnership Agreements*

Employment Agreements*
Change of Ownership/Business Acquisition* ( Copy of Buy-Sell Agreement and Copy of Escrow Instructions.)
Real Estate Acquisition* (copy of sale/purchase agreement, signed/dated, copy of escrow instructions, to include legal description.)
Hazardous Waste Assessments Report(s)* - (PHASE 1 or 2, must have for existing gas stations and frequently polluting industries.)
Real Estate Refinancing or Debt Payment* - (Copies of notes, escrow instructions and Settlement Sheet.)

*If applicable

USING THE POWER OF LEVERAGE

Leverage is an important concept to understand as an entrepreneur. Leverage allows you to expand beyond the limits of your own resources by using the resources of others. It is usually used in talking about capital (using your collateral as assets to "leverage" capital from other sources).

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Whether you are just getting started or have been in business for a number of years, chances are that you will need the expertise of an attorney. One of the most common complaints that lawyers make is, "why didn’t you get me involved
before you signed…?" Some small business owners think that by doing without legal help they will save money. In reality, they may pay much more in the long run. Its wiser to seek advice on the front end in order to minimize the risk of costly mistakes or litigation later on. This section addresses some of the many ways in which a lawyer can help a small business owner.

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There are many options and terms available when leasing office space. You may know precisely what you want in a lease. For those who do not, the following covers some of the areas which you will want to address in your lease negotiations. In addition make sure you review The Basics of Leasing.

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Confused by the various types of insurance and all the variations in coverage that are possible? This article describes three of the most common types of insurance and illustrates each with easy to understand examples.

PROPERTY COVERAGE

Property coverage can be divided into two segments in the business policy:

• For fixed property (buildings, fixtures, etc.) and contents (equipment, inventory, etc.) OR
• Purchased as a combined single limit (see Limits section).

Your property can be covered as:

• all risk OR
• as specified peril (see Limits section).

Almost all policies, exclude such events as wear and tear, as insurance is intended to cover sudden and accidental occurrences.

Example - If the motor in your 1952 copier suddenly ceases up and the copier dies, don’t expect coverage for the copier. However, if in its dying throes, the copier shorts out other equipment on the same line, there could be coverage for the other equipment (provided there are no exclusions for shorts) which is resultant damage of the copier wear and
tear; and it would be the same if a fire resulted from the copier.

The property section will cover the building (if other than your home) in which you do business:

• the fixtures utilized to run that business

  for example, commercial stoves, fixed racks, etc.

Contents used in your business are also covered here, if you elect this coverage. This includes all non-permanently affixed items:

• your computer
• your forms
• your inventory
• your stock, etc.

Example - A water pipe breaks and floods your office. The carpet, drapes, walls and ceilings would be covered under building coverage; the desks, computers, files, etc. would be covered under contents). There are also specific type of content policies which can be purchased to protect content, material on computer discs, ideas, etc.

Commercial Auto policies can include:

• collision
• comprehensive
• rental
• towing coverage for the automobiles owned by your business

Collision occurs when your vehicle hits, or collides, with another object (some policies, do not include hitting animals or falling objects under collision, but place damage caused by these in the comprehensive section), or if the vehicle overturns.

Example -Ace employee is rushing to make a delivery and hits a pothole, damaging the undercarriage of the car. This is considered collision, just as if he had hit a telephone pole or another car). Comprehensive picks up all covered losses that are not considered collision.

Example - Someone sneaks in and keys scratches into the paint on all of your company vehicles, comprehensive coverage pays to restore the cars to pre-loss condition. Or, if your vehicle is caught in a hail storm, or catches fire, the resulting damage is also covered by comprehensive coverage.

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The details of starting your own business may seem overwhelming, but one area that you should not neglect is insurance coverage. Many different types of insurance exist, including property insurance, liability, workman’s compensation, group health, life, disability income, "key man" insurance and others. "You can insure against everything and anything," says Gene Fairbrother, lead small business consultant for the National Association of Self Employed. "The most important thing is to know the risks you are taking. If you want to go "bare" (without coverage), that’s fine, but you need to understand what the
risks are."

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Financial Statements

UNDERSTANDING BASIC FINANCIAL STATEMENTS

How to Use this Tutorial

This Tutorial is designed to help the small business owner learn how to use financial statements as a roadmap on their journey to economic success. Using numbers as navigation aids can steer you in the right direction and help you avoid costly breakdowns. more…

The Balance Sheet shows a "picture" of the assets, liabilities and equity (net worth) of a business as of a specific day. The Balance Sheet shows two "views" of the business — what resources you
own (Assets) and the creditor or owner/investor that made it possible to acquire these resources (Liabilities and Equity).

Remember that Assets = Liabilities + Equity!
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