Commercial lenders in general and the SBA, will require a business plan to provide the narrative, projections and assumptions to support a loan request. The borrower/purchaser must show they understand all aspects of the business they seek to acquire, the industry in general and market conditions that impact the viability of the business.
A well thought out business plan clearly and succinctly articulates the principal’s strategies to manage and grow the business. A complete analysis of the competition should be presented to establish a comparison of ADR’s and occupancy data local to the subject property.
Business financials included within the plan should affirm the viability of the business relative to the proposed loan amount and the ongoing needs of the business and principals. In addition to the 3 most recent year’s business tax returns the Loan Analyst will require the current Year to Date Balance Sheet and P&L covering the first six months of the current year and the prior year Balance Sheet and P&L, covering the first six months of the prior year. These reports/proofs will be used to compare the first six months of current year to the businesses performance in the prior year.
“You only have one chance to make a first impression” Processing a commercial loan involves several departments and a review by number of individuals, it is therefore very important to articulate your grasp of the business, competence to manage and commitment/passion to succeed. Resumes are your silent salesman and should contain a photo of the principal/s. The resume should be tailored to articulate the borrower’s expertise in the industry, or that they possess the transferable skills necessary to achieve the desired business objectives and long-term goals. If one partner will be maintaining employment outside the business being acquired, it is important that the managing partner has the business acumen to successfully take over the business and run it, as well or better that the current owner.
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