Preparation checklist

Have you decided on your finance type?

The type of finance suitable for your business will vary depending on what you are using the finance for. The three main types of finance are Debt, Equity and Internal Funds.

Have you set a level of debt for your business?

In assessing the right level of debt for your business you can look at industry related benchmark data. Seek assistance from an advisor or prepare a business case to ensure you will be able to service the loan.

Have you established a debt term?

Consider short-term vs long-term debt. The rule of financing states that the debt term should match the life cycle of what you are funding.

Are you aware of how banks will assess your application?

Although each bank will have their own guidelines in assessing loan applications, they all will use the 5C’s to assist in their assessment:

• Character – the borrower’s reputation, integrity and ‘willingness’ to repay the loan.
• Capacity – the borrower’s ability to repay.
• Capital – the borrower’s current financial position.
• Conditions – the lender’s ‘terms’ and the ability of the borrower to meet these terms.
• Collateral (security) – the borrower’s ‘security’ for the proposed loan.

Also include a current business plan as part of your loan application. You can download a business plan template from the Resources page.

Have you consulted an adviser about your loan?

Consider using an adviser to assist in your loan application. They can save you time and possibly improve the quality of your loan application.