Virtual Accountant | A Company Overview Is Very Important
The business plan itself is an extremely important document says virtual accountant. And there are many reasons why business owners should have one in their business. Not only will it help them set their goals, and know what they have to do in order to achieve them.
But it is very important that an entrepreneur has a well-written business plan so that they can get approval on financing. Since 51% of all small businesses seek external financing. It is very important that as many business owners as possible understand how to use a business plan to increase their chances of getting an approval.
Many entrepreneurs think that the executive summary is the only important part of the business plan that their financial institution is going to look at. But they also need to understand how important the company overview section is. And what information should be included in it?
While the executive summary is going to show the bank all of the most important aspects of the business plan itself. Virtual accountant says the company overview section is important. Because it shows the bank all of the information that a business needs to have in place. In order to get that approval.
If the information in the company overview section is incomplete, the financial institution or underwriter might reject the loan application outright. Requiring the business owner to have to fix their business plan. Or go to another financial institution altogether.
The first thing that business owners need to consider is that the person that is going to be reading their company overview section is an external reader. And will likely have no prior knowledge of an entrepreneurs business. So they need to write it in such a way to avoid making any assumptions.
They should include their company’s name and contact information. Being sure to include not just the operating name of the business. The legal name as well. Therefore, if it is used interchangeably throughout the rest of the business plan. The financial institution and underwriter will clearly understand what is being communicated.
The next is the contact information of the business including the address, phone number, and email address. As well as a website if has one. Virtual accountant says the underwriter will verify this information. So it needs to be complete as well as accurate.
If an entrepreneur does not have a physical location for their business yet, they can put the address that was on their incorporation documents. Or the principal shareholder’s address. Just to ensure that they have included one in the section.
The next thing that they should include is all of the names and contact information of the business owner and all of the shareholders if there is more than one. Virtual accountant says they also need to include the percentage of shares that each of the shareholders owns. Because the bank will not lend funds to a business without knowing who owns what percentage of the corporation.
It is just the most basic information that an entrepreneur needs to ensure they have in their company overview section. They should ensure that it is complete as well as accurate. So that the financial institution can use that information to verify its accuracy.
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When entrepreneurs are creating their business plan in order to obtain financing in their business says virtual accountant. They need to be aware of the fact that the bank needs to verify certain information. In order to approve the loan.
By including this important information in the company overview section directly. Can help increase their chances of getting that loan approval. As well as help speed up the process. Because it will be easier for the underwriter to verify.
If an entrepreneur has listed investments as a security for their loan. It is important that they include investment information in the company overview section. Including the advisor’s name, company, and contact information.
The underwriter is going to need to verify those investments in order for them to be approved for use as security on the loan. So by including this information here. Can help the underwriter find the information quickly so that they can ensure it is accurate.
The bank is also going to need to verify that the business has general liability insurance. And they will need to do that as a part of approving the financing. Therefore, virtual accountant says if entrepreneurs include their insurance information in the company overview section.
They’re not only making it easier to verify. But there also demonstrating to the bank that they have all of the qualifications in the first place to be approved for the loan. This can not only help them get approved. It helps the approval process go as smoothly and quickly as possible.
Business owners should also understand that their bank will most likely require the principal of the business to have life and disability insurance. This is typically because if the principal of the business gets sick or passes away. The bank needs to have some sort of assurance that they will get their money back.
Financial institutions often even ask entrepreneurs to sign a guarantee that they are going to continue to have ongoing coverage as long as they are paying back the loan. When entrepreneurs include their life and disability insurance information in the company overview section.
They can show the bank that they have this important requirement. So that they will be far more likely to approve the business, for the loan that they need.
Business owners can also put their corporate lawyer information in the company overview section as well. Because in order to complete important paperwork. The bank will require a lawyer’s signature. Such as on personal guarantees, or security on properties and equipment.
When entrepreneurs include their lawyers’ information in the company overview section. The bank can contact with a lawyer directly. And get them the information they need to help finalize the application.
By understanding all of the important information that can go into a company overview section. Will allow an entrepreneur to fill this section out as thoroughly as they can. So that they can increase their chances of getting the approval that they need. As well as help make the approval process as efficient as possible. So that they can get on with starting their business.