derogatory items on the credit report. This means no late payments, no bankruptcies, no tax liens, and no foreclosures.
C)If these items are on your credit report, you will want to have a very good explanation along with documentation to support your case.
D)Existing trade lines on your report should all have at least a three year payment history that displays no late payments.
E)Existing trade lines should consist of: Mortgage on a home, or lengthy rental history, credit cards that are 50% or below the limit (This can be but not limited to, department stores, American Express, Visa, Master Card etc.)
F)For credit restoration you can contact First Stone of Atlanta @ www.firststone.com
CHAPTER 2
LET’S WALK!
Documents
Your preparation of crawling has taken place, now its time to take that first step, LET’S WALK!
Documents
It is very important to have all the correct documents in place, along with making sure all documents are extremely accurate. Keep in mind these set of documents are your rule of thumb for any business you are opening or starting: i.e. Restaurant, Hotel, Nightclub, Multi Unit, Storage Unit, Church etc.
A)Business Plan A business plan should have all information pertaining to your project, ranging but not limited to, experience, why one wants to start / in need of funding, projection etc. I highly suggest having a professional write the business plan for you.
B)Personal Financial Statement This document contains your entire financial history, your net worth, real estate holdings, stocks and bonds, liquidity, etc.
C)Resume/ Executive Summary This will state all of your experience in the industry that you are requesting financing for along with a brief description of why you are seeking funding. This should be no longer than a page long.
Projections
A)Balance Sheet You will need the last 2 – 3 years of your balance sheet. This document states all your assets and liabilities of the business; this document in most cases comes from your accountant via quick books software.
B)Profit and Loss Statement (P&L): You will need the last 2 – 3 years of your P&L statement. This document states the business profits and losses for that year; this document is also obtained from your accountant.
C)Year to Date Financials, or 2 – 3 year projections: Year to date financials refer to both the balance sheet and the P&L, these numbers consist of your current financial status. Projections are needed when opening or purchasing a new business. This document shows all your projected profits and loses, and what risks are involved (I highly suggest having a professional prepare these documents for you) over a 2 – 3 year period.
Taxes
A)Personal Taxes You will need your personal taxes from the last 2 – 3 years, whether its w2 or 1099 self employed.
B)Business Taxes You will need the current business taxes from the last 2 – 3 years.
C)Other Business Entities If you currently have other businesses, you will have to provide the business taxes from those, the last 2 – 3 years.
Credit Report
You will have to obtain a recent credit report from all three major credit bureaus: EquiFax, Experian, and TransUnion what is commonly known as a TRIMERGE credit report.
CHAPTER 3
LET’S TALK!
Creating and Submitting a Complete file To the Bank OR Funding Source
Up to this point we have learned to crawl and walk, now lets take it a step further, LET’S TALK!
Submitting a complete file is very important when seeking funding for your business. You want to make sure all your paper work is in the proper order and no documents are missing. This is the order your documents should be submitted:
BUSINESS DOCUMENTS
A)Executive Summary You want to submit an executive summary on the project you are seeking funding for. This summary should consist of one page and one page only, This will give a quick snapshot of your project and why you are seeking funding. Your summary should be very detailed, however not long, getting straight to the point. I will have an example of one in the forms section.
B)Business Plan Once again I highly suggest getting this done by a professional. Your funding source will want to see realistic numbers and projections.
C)Financials If you are purchasing an existing business you will want to provide the last 2-3 years balance sheet and P&L along with the business tax returns. You can get this from your accountant. This will give your funding source a snap shot of what the cash flow for that business looks like.
NOTE: You want to make sure that all your documents are in a very professional format such as Word, Excel, Quick Books, PDF form. You want to make sure that you are not missing any pages when it comes to the tax returns, all schedules must be included.
Personal Documents
These documents will let your funding source know what your personal financial status is.
A)Personal Financial Statement These forms consist of 3 – 4 pages (I will have this in the forms section). This information will give your funding source an overview of what your net worth is currently. This will also show all assets and liabilities along with other pertinent information.
B)Resume This document will include all of your work history that pertains to the type of funding you are seeking.
C)Personal Tax Returns Your last 3 years personal tax returns with all schedules included, this can be w2 returns / self employed or both.
D)Copy of Your Credit Report This report should be the most recent report, all three bureaus: EquiFax, Trans Union, Experian should be submitted.
CHAPTER 4
MONEY SOURCES
Locating a Reputable Lender (Bank, Funding Source, Private Money)
Locating a reputable money source is a very important and vital piece to securing funding for your business.
So, let’s put all that we have learned, crawling, walking, and talking into the understanding stage: It’s now time to formulate sentences to where our funding source understands what we are asking for and why.
A)Banks The current bank that you have a relationship with may be one of your choices to submit your request for funding. You may attempt to build a relationship with other major banks such as: Wells Fargo, BB&T, Bank of America, Chase. These are just some of the major and larger banks that you may want to consider.
B)Private
