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Unformatted text preview: past ﬁnancial results, and personal
ﬁnancial statements of principals.
Most banks will use commercial scoring methods to evaluate a loan based on indicators including
the worth of assets and ratios measuring debt and liquidity. Business ratios, which we discussed in
Chapter 17: Finish the Financials, can be very important. The Physical Document
For banks, submit a document a bank loan manager can pass around. It should be clean, bound,
clearly marked with cover page and legal page, easy to read, and well illustrated. Wire coil binding
is better than plastic and velobinding. Invest in strong covers, and make sure the vital information is
clearly visible from the cover, or through a window on the cover page.
Legibility is important. Don’t save paper with small fonts, and do use graphics and color where you
can. Try to illustrate all key numbers with business charts.
Don’t go overboard with your plan. Bankers are not going to be impressed by exaggeration of
graphics, too many illustrations, or too much effort to make a plan ﬂashy. They want to see that the
business plan is developed by people who understand business. It should be easy to read, practical,
complete, and concise. HURDLE: THE BOOK 22.6 ON BUSINESS PLANNING Submitting a Plan to Investors
Mind the Law
Be aware that securities law covers investment offers. It is illegal to sell shares in your company to
people not qualiﬁed as investors. This is not the format for a long legal discussion, but at least you
should know the basics. Securities law regulates investment offerings carefully. You can do some
good research at www.sec.gov/answers/accred.htm for example, but make sure you consult a qualiﬁed
attorney before making an investment offer.
Avoid turning to friends and family for investment. The worst possible time to not have the support of
friends and family is when your business is in trouble. When the business is ﬁnanced by friends and
family, you risk losing friends, family, and your business at the same time. I know an entrepreneur
who stuck with a l...
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This note was uploaded on 01/26/2014 for the course BUINESS 102 taught by Professor Unknown during the Winter '09 term at University of Phoenix.
- Winter '09