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The reason that the company overview section exists in the business plan. Is to help the bank and the underwriter have all the information they need to know in order to approve the loan or not.
If vital information is missing from the section. That might cause the bank to have to go back to the business owner and request this information. Putting a delay in getting the loan approved. Or, the bank might simply reject loan outright, for not having all of the information.
One important thing for business owners to keep in mind is that even if they are very familiar with their bank and the banker that they speak to. This is not typically the person that is going to be looking at their business plan in making the decision.
Virtual accountant says they will typically be handing the business plan over to an underwriter. He is going to objectively look at the business plan. In order to make the decision on whether to approve the loan to the business or not.
Therefore, a business owner should not make any assumptions that the underwriter is going to know what they are referring to. So they should include as complete information as they possibly can.
This should be specifying the companies legal name as well as the company’s operating name right in the overview section. This way, if entrepreneurs end up using either name interchangeably throughout the rest of their business plan. The underwriter will be able to understand exactly what the business owner is talking about.
They also need to ensure that when they are specifying the business owners of the business. If there is more than one shareholder. They get included in the company overview section. Especially what percentage of the corporation each shareholder owns.
This is important information that the bank is going to require before they can loan the money to the business. And it might even impact the bank’s decision on whether they are willing to loan money to the business or not. Based on the shareholders and what percentage of the corporation they own. Making an extremely important to have this information here.
Often, basic information like phone, address, email, and website is overlooked. Business owners often that it is obvious, or they do not think that they need to specify that in the company overview section.
This is often the case says virtual accountant. If a business owner is applying for a loan at a bank that they are familiar with. However, this is not always going to ensure that the bank knows this information. Making it important that a business owner makes it crystal clear by putting it into the company overview section.
The company overview section is an important part of the business plan says virtual accountant. Because not only can it help an entrepreneur get approval by the bank for their loan. It also can help ensure that the rest of the approval process goes quickly and smoothly.
Many entrepreneurs realize how long the loan approval process can take. Especially when business owners are thinking of how long it took them to get a mortgage on their home. If they think it is going to take the same amount of time. They might be very disappointed that it takes significantly longer.
So by including important information in the company overview section. They can speed up the approval process as fast as they can. So that they can continue with important plans for their business.
Business owners should specify if they are working with an accountant. Especially if that accountant helps them with their business plan says virtual accountant. The reason why is because banks see working with accountants is a way to lower business risk.
The reason why, is because an accountant will help an entrepreneur have accurate cash flow projections, a well thought out a financial plan. And often, a great marketing plan that is going to help them increase revenue.
Even if the entrepreneur only had an accountant help them with their business plan, they should include that accountants’ name, practice, and contact information. So that the bank will see that as a positive influence over the business. And be more likely to award that business the loan.
It is also important that an entrepreneur has general liability insurance in their business. And it will be a requirement of getting the loan approved. Therefore, virtual accountant says if a business already has that general liability insurance. Putting the proof of it within the company overview section. Can help speed up the approval process.
It is also the same thing for life and disability insurance for the entrepreneur. Banks typically require the shareholders or the principal owner of the business to have life and disability insurance. Not just at the time of proving the loan. But throughout the life of the loan.
This way, the bank will know that they will be able to get their money back. If the business owner responsible for growing the business gets sick, gets injured, or passes away. By including this insurance information into the company overview section. Can help the underwriter be more likely to approve the business. And can speed up the application process as well.
By knowing what the company overview section is. And all of the information that an entrepreneur can include in it. Virtual accountant says business owners will be able to write a more effective company overview. So that they can increase their chances of getting the loan approved. As well as speed up the approval process. So that they can continue growing their business.
