Virtual Accountant | Why A Company Overview Is Important
Out of their entire business plan, many entrepreneurs are told that the executive summary is the most important section says virtual accountant. This is because it will have a summary of all of the most important parts of the business plan.
However, that does not mean that all other sections are not important. The company overview section is the section directly after the executive summary. And can be just as important. Because it helps the bank to see that the entrepreneur has the requirements needed to get approval.
If business owners are not aware that financial institutions use this section to verify the accuracy of the information. As well as to ensure that they have everything that would be required of them to get the approval. They may not spend the time needed on this important section says virtual accountant.
It should be considered more than just a place for an entrepreneur to include the name address and contact information of the company and the business owner.
But also a section for the entrepreneur to include all of the pertinent information they are going to need to have in place. In order to qualify for the loan.
In addition to understanding all of the information that needs to be in this section. Virtual accountant says that entrepreneurs also need to ensure that they are not making assumptions. And completing all of their contact information as thoroughly as possible.
Starting with the name and contact information of the company. Business owners need to include not just the operating name. But the legal name as well. So that anywhere else in the business plan that one or the other is referenced. The financial institution will be able to understand very clearly what it means.
A business owner should not avoid putting down an address for their business. Even if they do not have a physical address yet. If they have incorporation documents. it can include the address that was used for this documentation.
In addition to the phone number, email address, and website, if applicable. Business owners need to keep in mind that the banker or underwriter is going to look up all of this information to verify its accuracy. So not only does it need to be complete. But it also needs to be accurate as well.
The next thing that an entrepreneur will include in the company overview section is the complete name and contact information for the shareholder. Or all of the shareholders if there is more than one.
This also means that business ownership including what percentage each shareholder owns of the corporation. Because this is actually vital information for the bank to know. And they will not approve the loan application. If there is more than one shareholder, but the percentage of shares they hold is not specified.
By understanding how to fill out the company overview section completely. And what information should be included is extremely important. Without a properly completed company overview. Business owners may significantly slow down the loan application process. By requiring the banks to contact them multiple times for important information.
Or, the bank might simply reject the application for being incomplete, causing the business owner to have to start again. Or seek out other financial institutions for their loan.
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Business owners should consider the importance of the company overview section in their business plan says virtual accountant. As the bank will look at this section in order to see if the business has the requirements they need to get approval for the loan.
Therefore, as much information as a business owner can provide in this section. Can be incredibly important. For example, the bank will require certain securities and insurance for example. In order to approve the loan. So by including this information in the company overview section. Can increase entrepreneurs’ chances of getting approval.
A great example of this is general liability insurance. A bank will need to verify that a business has this before they obtain financing. So getting their insurance in order ahead of time can be incredibly beneficial.
Virtual accountant says by putting the insurance information in the company overview section. Can not only show the bank that they have this important requirement. But by including the insurance companies name and contact information. Can make it very easy for the underwriter to verify that information as well.
Another example of information that should be included in the company overview section is life and disability insurance for all of the shareholders. This is an important requirement that the banks have to ensure that they can coop their money if the principle of the business gets sick or passes away.
They often also ensure that the principle of the business has signed documents thing that they will continue to have the life and disability insurance as long as they are paying back the loan. Therefore, an entrepreneur who shows that they already have their life and disability insurance can pass that requirement. And make it much more likely that they will get approved for the loan.
Even if an entrepreneur into their overview section the business professionals that they work with. Can help increase their chances of getting approval. Working with an accountant for example shows the bank that they are a lower risk. Because they will have a well-thought-out business plan. As well as a realistic cash flow projection.
By including their accountant’s name, practice, and contact information. Business owners can demonstrate to the bank that they have plans in place on how they are going to grow their business. That they are working with a business professional that going to help them succeed in business.
Even though many business owners see the executive summary as the most important section of their business plan. Virtual accountant says by not overlooking their company overview section. Can help entrepreneurs fill it out completely. \\So that they can not only increase their chances of getting approval. But they can help speed that process along so that they can start their business as quickly as possible.