No matter how good you think your business plan is, without finance to back it your business will not get far. By following some of these simple guidelines you may increase your chances of getting your loan approved and your business off the ground.

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What do you need to know about it?

There are many different types of loan that you can apply for, from diverse organisations that deal with different types of business. Before you apply for a loan, try to find out which organisation it is best to send your application to.

Some of the reasons that businesses fail in their applications are:

• Bad work at the planning stage
  
  
• Business plans that make assumptions (or huge leaps of logic) without the research to back it up - poorly thought out financial plans would fall into this category
  
  
• Badly written and presented business plan - If your business plan is poorly presented it may not even get past the initial phase of consideration

Competition

You are probably not the only person who has thought of this business idea. If it is not a new idea but one that is filling a lack in your area or sector, do you have any competitors? It always pays to know the competition.

Drawing up the business plan yourself

Not knowing what is in the business plan or being unable to answer questions on it will not help your cause. Professional advisers will be able to draw up a plan for you, but you still need to be able to present and explain it. Although you need to be able to answer questions on it, it should be self-explanatory where possible.

What do you need to do about it?

Make your application snappy! A long and windy business plan with your thoughts on every aspect of the business is likely to bore the reader.

For the plan to succeed it should be:

• Interesting
• Short
• Clear
• Easy to understand

If you must use anything other than laymen's terms, make sure you explain the terms you use.

Lastly, these are just some of the areas that the lender will be paying close attention to. It will increase your chances of success if you bear these in mind when you are writing your business plan:

• You - The lender will want to have confidence in not just the business plan, but also the other things that make a business work. The organisation, the management, the workforce and the product or service will all be of interest.
  
  
• Time - Allow enough time for approval to come through. It is best not to state in the timescale that you are relying on the lender to come through for you to keep to the timescale. There is no guarantee as to how long a decision will take.
  
  
• Finances - If your idea is unlikely to make any money you will not get the loan. This sounds like a simple concept and it is. Make sure that you back up all the statements you have made with profit and loss projections and cash flow charts, and show the reasoning behind your projections.
  
  
• Failsafe - It may serve you well to show that you have considered the worst-case scenario and what security you are using to back up your business plan if it fails.
  
  
• Marketing - This is also something that lenders will be interested in. What is your marketing strategy? This should be included in your plan.

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