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While many business owners take a lot of the information that is contained in the company overview section for granted. Or assume that the information is common knowledge. There are many reasons why it is important for a business owner to ensure they put as much information into the section as possible.
A lot of the information contained in the section is vital to getting a loan application approved. And if the banker or underwriter cannot easily find the necessary information. It may either slow down the loan application process. Or they could end up rejecting the loan altogether.
One of the first pieces of information that a business owner should ensure is written in the company overview. Is the legal name as well as the operating name of their business. This is to avoid confusion says virtual accountant. And while a business owner might use the two names interchangeably. The banker or the underwriter might not know both names as well. Which is why they should include them.
The next thing business owners should ensure that they are doing, is indicating who the shareholders of the Corporation are. If there is one shareholder. They should include their full name, address, phone number, and email address.
If there is more than one shareholder. They need to include all of that information for each shareholder. As well as the percentage of shares that they own the corporation.
The bankers are going to want to know who all of the owners are in the corporation. Before they will consider loaning money to the business. And they will do their own research on each shareholder. Which is why all of their contact information needs to be in the section.
The next thing that a business owner should ensure that they are putting into the company overview section. Is all of the information about the business. Such as address, phone number, email address, and website if there is one already.
If the business is not yet open. It might not have a physical address says virtual accountant. However, the principal shareholder can use their own address for this purpose. Or if they are incorporated, whatever address was used for the incorporation of the business.
These are all very important things that an underwriter and a financial institution will want to know in order to loan money to the organization. But there is even more information that can be very beneficial for a bank to know in order to make their decision.
If they have an accountant already. This is also important for the banks to know. Because they often see businesses that are already working with an accountant as a lower risk. Typically because they will have a well-thought-out business plan. And there cash flow projections will be realistic. Since this can help increase the chances of obtaining a loan. It should be included in the company overview section.
When business owners are thinking about the information they put into this important section. They will increase their chances of getting alone. And help speed up the process as well.
The purpose of a company overview section in a business plan says virtual accountant. Is to help the banks understand exactly all the people that are involved in the business.
The bank often needs to ensure that there loaning money to a business that will be likely to pay it back. And therefore, the more information a business owner can put about all of the people that are involved. As well as all of the professionals that they have hired to help. The better chance they will have at getting approval.
For instance, in order to finalize the loan if it is approved. The business owner will need to have a lawyer. This is to sign important paperwork such as security on property and equipment that must be registered. As well as signing personal guarantees.
Since a business owner will not be able to use the bank’s lawyers to sign these important documents. Having a lawyer already in place is very important. It can help speed up the process. Especially if the bank can just send the loan information to the lawyer to complete. And therefore it is very important to put into the section.
Quite often, a business owner will need to provide proof of security. And if they are using investments for this purpose. They should include that information into the company overview section. If they work with an investor for this purpose. They should include the investor’s company, name, and contact information. So that the banker or underwriter will be able to contact them easily and verify the investments.
Another step that business owners might not be aware of in the loan application procedure says virtual accountant. Is that the bank will verify if the business has general liability insurance. Prior to approving funding. If a business has general liability insurance already lined up. They should put this in the company overview section. So that the bank does not have to spend additional time looking for this information.
Another consideration that business owners should think about when they are filling out there company overview section. Is that banks often require entrepreneurs to have life and disability coverage in order to get a loan. The reason why says virtual accountant is because they want a way of ensuring that they can get their money back if something happens to the business owner.
If the business owner has life and disability. And they get sick or pass away. The fact that they have life and disability, will mean that the bank can recoup the cost of the loan. Which is why it is very important that all shareholders of the Corporation have this insurance.
Therefore, they should include all of the information of the insurance company they have their life and disability plan through. As well as the advisors and their contact information for each of the shareholders.
By filling out the company overview section completely. And including more than just the name and contact information of the business owners. Entrepreneurs will be far more likely to get approval for the loan that they have applied for. And be able to get approval much quicker as well.
