Part 8: Questions Your Lender Will Ask
The Small Business Administration has published a series of links about the most common question asked by individuals looking to start a business, "How do I get money to start my business?" This series of 8 posts will begin to answer this complex question.
From http://www.sba.gov/ : Before you apply for a loan, you need to think about questions like these:
Can the business repay the loan? (Is cash flow greater than debt service?)
Can you repay the loan if the business fails? (Is collateral sufficient to repay the loan?)
Does the business collect its bills?
Does the business pay its bills?
Does the business control its inventory?
Does the business control expenses?
Are the officers committed to the business?
Does the business have a profitable operating history?
Does the business match its sources and uses of funds?
Are sales growing?
Are profits increasing as a percentage of sales?
Is there any discretionary cash flow?
What is the future of the industry?
Who is your competition and what are their strengths and weaknesses?
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