They want to see the management team in person listen

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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.

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