To obtain a professional loan, the project leader or manager must convince the bank of the interest and the profitability of his project. To do this, he must endeavor to present it through a complete, concise and precise business plan. He must also take into consideration the process by which his financial partner, most often a bank, goes through to study and validate his request for financing.In this article, we explain what the business loan is, what documents you need to provide to apply for a business loan, and how to prepare to negotiate obtaining the loan.
THE PROFESSIONAL LOAN: DEFINITION AND CONDITIONS FOR OBTAINING.?
What is a business loan?The professional loan is certainly the most common financing solution. It consists in asking a banking establishment to advance all or part of the sum necessary to launch a project to create a business, take over or develop an existing activity. Most of the time, to reduce the risk linked to the uncertainty of the project’s success, the bank asks for compensation (personal surety, mortgage, guarantees, etc.).A bank manages risk. It only invests when the viability and profitability of a project seem sufficient to it. A profitable project guarantees the company’s ability to repay the loan and therefore the financing operation for the bank. The more a project is deemed profitable, the more likely it is to find financing and the more attractive its conditions will be.
With which establishment can a professional loan be made?
The professional loan is one of the many financing solutions. It can be obtained from mainstream banking establishments or from more specialized establishments. Some organizations such as the BPI help entrepreneurs by guaranteeing a significant part of the professional loan.A professional loan application can be made with a bank or a credit broker . The latter is responsible for finding the establishment and negotiating the conditions for obtaining the loan.
THE ADMINISTRATIVE DOCUMENTS TO CONSTITUTE YOUR PROFESSIONAL LOAN APPLICATION
The composition of the professional loan application file.The professional loan application file must contain the documents enabling the banker to study the project and assess the solvency of the company and/or the project leaders, such as:A commitment can block the current accounts of the partners so that the professional loan is not used to repay the current accounts of the partners but to develop the activity.
Presenting your funding request to the committee
Most of the time, the financing file is entrusted and explained to an advisor who will have to defend your file with a financing committee. You will therefore not have the opportunity to defend your project yourself.Remember to make an accessible and understandable business plan and to present a complete and well-prepared file so that the adviser who presents your project has all the elements to defend your professional loan application.
THE PRESENTATION OF THE PROJECT AND ITS FINANCING TO THE BANKER
As we have just seen, it is possible that a third party will be responsible for presenting your project.It is therefore essential to be very careful to answer in advance the questions that your adviser and/or the members of the committee will inevitably ask about your project.
The presentation of the project
The value of your business plan lies in its ability to describe your project, to highlight the key points and to prove its viability thanks to its financial part.The financial forecast is not only used to validate the viability of the project, it also makes it possible to assess the amount necessary to carry it out. It gives credibility to your business loan application.