HOW TO BORROW

An Abo and Company observation? We note many businesses start small and use capital that was either provided by the owner or by friends and family. If the business takes off, the initial capital won't be enough so that bank borrowing will be required. To improve your chances of obtaining a loan:

• Determine the reason for borrowing and the amount, nature and term of the loan you require.
• Provide a dossier that includes the names and backgrounds of the owner(s), a company description, products and services being provided, a description of the operation, a market analysis and marketing plans.
• Provide personal financial statements and tax returns, a current business balance sheet and income and cash flow statements for the past 3 to 5 years, as well as projections for the next few years.

Think it’s tough out there? Well maybe it is and the papers are right. Still, we hear from many of our lender colleagues that they are anxious to do business, but they want to avoid excessive risk. Accordingly they analyze the five "C"s of credit to determine whether to extend a loan. These are:

• Capacity to repay
• Capital investment of the owner(s)
• Collateral provided for the loan
• Conditions for the use of the money to generate a favorable return
• Character of the owner(s) (education, experience, trustworthiness)

Assessing borrowing requirements, developing appropriate documentation, finding suitable lenders, negotiating loan terms and monitoring business progress are just a few of the services we provide to help clients obtain the financing that is needed for business growth and expansion.