CHAPTER 7
Money Money Money and the Forms to Get It
HOW THE BUSINESS IS GOING TO BE financed or capitalized is highly dependent on how your business is funded. If your business is not selffunded, you’ll need to know how to apply for the type of financing that fits your business entity, model, and short and long-term plans. As far as the forms you’ll need, it all depends on the type of loan you apply for.
A credit analysis is one of the first things a bank will assess when a person or business requests a loan. If you don’t know yours or your business’ credit score, it’s imperative to obtain it via your personal credit report. The three credit bureaus are TransUnion, Equifax, and Experian. You can obtain your report by calling each bureau or applying for it on the bureau’s website. Once you receive your report, review it for errors and other potentially disputable information. Use the Sample Credit Dispute Letter in this chapter to challenge information that’s possibly hurting your credit score.
If you’re seeking grant money, use the Sample Grant Proposal (included on the Web) as an example of how you can take your grand vision and portray it in writing with clear measurable objectives.
Qualifying for financing doesn’t have to be a chore so long as you’re prepared with the proper arsenal of paperwork—and proof. Use the Sample Loan Request form to request small business loans from banks or federal programs.
Refer to the Sample Cover Letter for the loan application to ensure your request is formally prepared, making it easier for the lender to review your application and assess its key points.
If your business model is devised for high growth, you may be seeking venture capital (VC). To be considered for venture capital, your potential investors will ask for an executive summary. Even if you have an executive summary prepared, review the Sample Executive Summary in this chapter to show you what information VCs expect to see in a finalized document.
The SBA is another resource business owners can use to fund their operations. A variety of loans are available through the SBA, which recommends having the following forms prepared to qualify for its Basic 7(a) loan: Review SBA Loan Application, where you’ll see where to provide a description of how the loan funds will be used, the purpose for the funding, and the amount and type of loan.
Also from the SBA is the SBA Schedule of Collateral . On this form, list real property and other assets to be held as collateral. Also required by the SBA when submitting a loan application is the completion of the SBA Personal Financial History and Personal Financial Statement. The SBA requires financial statements for all owners, partners, officers, and stockholders owning 20% or more of the business.
Qualifying for financing doesn’t have to be a chore so long as you’re prepared with the proper arsenal of paperwork—and proof.
58. Sample Cover Letter for Loan Application
59. Sample Credit Dispute Letter
Your Name
123 Your Street Address
Your City, ST 01234
The Credit Bureau
Bureau Address
Anytown, State 56789
Date
Dear Credit Bureau,
This letter serves as a formal complaint that you are reporting inaccurate credit information.
I am very distressed that you have included the below information in my credit profile due to its damaging effects on my good credit standing. As you are no doubt aware, credit reporting laws ensure that bureaus report only accurate credit information. No doubt the inclusion of this inaccurate information is a mistake on either your or the reporting creditor’s part.
The following information therefore needs to be verified and deleted from the report as soon as possible:
I am disputing the negative information on my credit report for the following reason:
CREDITOR AGENCY, acct. 123-34567-ABC
Please delete the above information as quickly as possible.
Sincerely,
[Signature]
Your Name
SSN# 123-45-6789
Attachment included.
60. Sample Executive Summary
61. SBA Loan Application
62. SBA Schedule of Collateral
63. SBA Statement of Personal History
64. SBA Personal Financial Statement
