Maximizing The Impact Of A Business Plan

In commercial loan dealings your business plan is vital. No lender is going to loan you money for a start up business without one. It is your job to make sure that your business plan completely blows the lender away so they see you are a serious business person that has what it takes to succeed (and pay your loan payments!)

Maximizing your Business Plan

You can maximize your business plan in a few ways. You will first want to make sure that you understand how to create a business plan and what information needs to be included in your plan. You should seek the assistance of a professional who can help you with this.

Once you have your plan, you can really bump up the impact. You should make it look stunning. This does not mean adding pretty colored paper. Make it as clean and professional looking as possible. Use color ink so graphs and charts appear prominent, especially for the good news part of the plan such as forecasted earnings!

You should also carry yourself professionally. Yes, the way you look can downplay your business plan. Dress to impress and you will see how much more seriously you and your business plan are considered by the lender.

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It can be confusing trying to figure out all the factors a lender uses to qualify you for a loan.  While there may be many things a lender looks at when deciding to give you a loan, there are really only three things that are going to matter.

- collateral
- credit
- income

A lender is always thinking about getting paid.

They want to know you will pay them back.  If you have good collateral to put down on the loan then the lender likes this because they know if you default they get that collateral.  They like to see good credit because it shows you pay back your debts.  They also like to see steady and stable income so they know you have the money to pay them back.

The bottom line in qualifying for a loan is that if a lender can not be certain you will pay them back then you will not qualify.  It really is that simple.

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It is often confusing why lenders would charge higher interest rates to someone with bad credit.  A person with bad credit does not need the higher payments on a loan that come with higher interest. 

It seems more rational to charge a person with bad credit lower interest so the payments can be more affordable and they are not stuck in the loan for so long.  However, there is very good logic behind the lender charging higher interest rates to bad credit borrowers.

When a loan payment is made only part of that payment is paying the actual loan balance.  The majority of the payment pays the interest and that is money directly in the lender’s pocket.

The lender isn’t stupid.  They know that a person with bad credit is more likely to default on the loan, so they charge higher interest so they can get more money in their pocket right now just in case the borrower defaults.

Now that is smart lending.

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