Internet Business Strategy: Use Your Business Plan To Get a Loan From The Bank


If you ask at your local bank, the friendly bank officer will be glad to give you a blank business plan document for securing a business loan. That one page outline that you fill in will generally supply all the information a bank needs to refuse your loan! Keeping in mind that most bank employees are not entrepreneurs, they have a different mind set from people like you, who are accustomed to taking risks and reaping the rewards. Here's a simple plan for using your own business plan to get a loan and a "Wow!" from the loan committee.

First of all, you need to have a complete business plan to present that is different from the run-of-the-mill plans that loan committees usually review. These "standard" business plans are crafted with an eye to impressing bank loan officers, not detailing the actual framework, budget and all-important mission statement that a sound business plan will include. The usual business plan will have a bunch of facts and figures that try to imply that the prospective borrower has discovered a way to do business that just can't lose money. Forecasts of sales and costs will be wildly optimistic, but described as "conservative" and "low-ball".

Here's where you can make your presentation stand out and create a seriously credible impression. Have your business plan reviewed by a professional business planner, one who specializes in business plans for owners who are serious about planning their business, not just impressing a loan committee. Use a clean, professional format to present your plan. Avoid using too much jargon or "business-ese" in your descriptions and text. Make a dozen copies of your plan and put them in a nice cover, perhaps with a clear front for your title page.

When you are ready to go for your loan, call ahead to the bank and set a time to meet with your regular banker or "platform officer". Better yet, make appointments on the same day with different banks. Bring along your dozen copies of the plan and be prepared to answer questions about your loan requirements. Make a point of asking how many copies of your business plan you should leave with the bank officer. Generally, they'll be surprised you have more than one. Usually, they'll recommend three or four at the most.

You should mention that you are shopping around for the best rates and amounts you can get. Imply that your time is limited, since you have another appointment at another bank. Create as many positive points in your favor as you can, along with a sense of urgency - if they don't want your business, another competitor does!

Make sure you ask probing questions about the loan itself. Find out if there's a penalty for paying it off early, or increasing the amount of your payments, to pay down the principal faster. Always act as if you're dealing with a business colleague, not as a beggar coming to ask a favor. Don't be tough, don't be humble - be matter-of-fact.

You already know the difficulty of explaining Internet Marketing to your friends and family. Multiply that by a factor of five when dealing with bankers - unless you're lucky and get one that "does eBay", or even has his/her own IM business on the side. Make sure your business plan "spoon feeds" how you do business and how you make your profit. You don't have to talk down to them to make your plan clear - just describe what you do in Plain English.

The better prepared you are, the more likely it is you'll get your loan - and a "Wow!"

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Jo Han Mok is the author of the #1 international business bestseller, The E-Code. He shares his amazing blueprint for creating million dollar internet businesses at:

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