Your Best Chance To Impress

Just last week, we had 2 different loan requests delayed even though the lenders liked them at first glance.  Why were they delayed?  Because the borrowers didn’t provide enough detail in their financial models or proforma’s. All too many times we get loan requests that are rejected primarily because their financial models didn’t demonstrate that the borrower really knew what their regular expenses would be and/or properly illustrate how they were going to generate revenue to service the debt and remain solvent.

Understand that lenders and their underwriters rely on the financial models or proforma’s to provide a clear picture of the firm’s ability to generate revenue and meet their obligations.

Financial models and proforma’s need to be very detailed if you want your loan request funded. Some underwriters and lenders will review the proforma before any other document you give them. Here’s why; because the financial model or proforma will tell them if you have a good handle on the day-to-day requirements to be successful with your business or project.

Want a few tips in preparing your financial model or proforma? Provide the information in an Excel spreadsheet format as it makes it much easier to follow specific line items over the months and years. Always provide projections for, at least, the same period of time that you want to repay the loan or investment. Add line items for each and every source of revenue so there’s no mystery about your ability to repay the loan or investment. Again, be very detailed about your monthly and annual expenses.

Be sure to include repayment of your loan at the same interest rate being offered. If you’re not sure what that interest rate will be, go with a higher rate. If your project or business can cash flow positively at the higher rate, then the lender will take note and will be more likely to embrace your request.

Your CPA or accountant should be able to help you. But, if you’re not sure that your financial model or proforma is up to the task, ask us and we’ll be glad to give it a FREE review for you.

If you need help, ask us for it. Visit us tomorrow for another free commercial loan secret and be sure to subscribe to our RSS feed.

You can also contact us to ask questions and voice your concerns. Just pick up the phone and dial, CFIC Funding, Inc. today at 310-421-7370! Ask for David Young or Wayne Clinton. You can also visit http://www.cficfunding.com or mail david@cficfunding.com or wayne@cficfunding.com