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Since 51% of all small businesses seek external financing. That means many entrepreneurs need to understand not only how important the company overview section is. But what information they should be including here.
The company overview section includes important information the lender requires in order to approve loans. By missing information, entrepreneurs can delay their application or have it outright rejected by their financial institution.
Not only do they need to include important information says virtual accountant. But they need to ensure that it is accurate and complete as possible. Because the financial institution will not just be looking for that information. They will have an underwriter, whose job is it to verify all of the information in this section.
If the underwriter cannot find important information. They may reject the application. Because it does not contain what they need. So by filling out the section as completely as possible. They make it as easy on the underwriter is possible to verify the information is accurate.
The first thing that they should include in this important section. Is all of the company information. This means not just the operating name of the company. But the legal name as well to eliminate confusion.
As well as all of the contact information for the business as well. This means an address, phone number, and email address. As well as a website if the business has one. If there is no physical address of the business yet. A business owner can include the address that was used on the incorporation documents.
The next information they should be putting in the company overview section is about the business owner themselves. Their name, address, and contact information should be included. And if they have more than one shareholder. They need to include this information for each of the shareholders as well.
In addition to the contact information. Virtual accountant says they should include what percentage of the corporation each shareholder owns. Because that is information that the bank is going to require prior to approving the loan.
By making sure that the business owner has all of this information filled out as completely as possible. Minimizes the chance of missing something. Or assuming that the bank already has that information. Even if they bank with this financial institution. They need to ensure that the company overview section is as complete as possible. So that the underwriter can do their job and verifying the information.
Once they have this information in the company overview section. They need to consider what other information can be included. So that they can be more likely at getting the loan approved. This can include information on their securities, business professionals that they work with, and even insurance information.
By including as much information as they can. Business owners can help their chances of getting approval. And help the underwriter verify the information as quickly as possible. So that they can get the loan in a timely fashion.
Business owners need to understand how important the company overview section is says virtual accountant. So that they can put the time required to fill it out completely and accurately.
Many entrepreneurs do not consider putting any other information in this section. Other than the company and the entrepreneurs’ address and phone numbers. But the more information they can include in this section. The more likely they can be at getting an approval.
For example, if an entrepreneur is working with an accountant. They should let the bank know this. Because it can often be considered a risk mitigation factor. The reason why says virtual accountant. Is because it typically means that their business plan is more well-thought-out.
In that, the accountant will help ensure that they have accurate information. Such as in their cash flow projections. An accountant can also help a business owner understand their finances on a much deeper level. So that they know important information. Such as what their revenue needs to be at, and how they are going to plan on getting there.
In addition to an accountant, business owners should include the name of their corporate lawyer as well. This is important because they will need to have a lawyer to help them fill out important paperwork such as personal guarantees, securities on the property, and equipment. These letters must be registered. And must be completed by an entrepreneur’s own lawyer.
By including this information in the company overview section. Can help underwriters understand exactly who they can contact for their next step, to help speed up the loan application process.
A business owner can also consider all of the different information that the underwriter must verify. In include that information in this section. To make their job of verifying it much easier. For example, it will be required that an entrepreneur has general liability insurance.
By including their general liability insurance information including the insurance company, and contact information of the advisor. Can help the underwriter see that not only does the business have this important requirement. But also, they will be able to verify it quite easily.
Even their investment information is important to include says virtual accountant. If they’re using that investment as a security on the loan. Putting the investment company that they use, the advisor, and the advisors contact information. Can help speed up their loan application process. Because the underwriter will be able to very easily verify the investments.
By anticipating the information that the bank is going to ask for, and will need to verify. Can help ensure that business owners are improving their chances of getting the loan approved. Because they have all of the requirements.
And it can also help speed up the process. Because they’re making it as easy as possible to verify all the information. By doing this, entrepreneurs will be more likely to get that important financing. And to get that financing in a timely fashion. So that they can proceed with their business ownership goals.
