My cousin and I have been working on a business plan for about 6 months now, it's very solid and sure to impress. We want to open a clothes store with very fair prices in a town of about 20k, there are only two clothes stores, one is Walmart and that really doesn't qualify as a fashion store, and Stage - which is very expensive. We've got EVERYTHING that we need, if we had good credit we could walk into the bank and get the loan no problem - I'm positive of it.
I'm 20 and shes 22, we have no credit history what so ever - and just a tad of business experience. So basically we're screwed, unless we have help. My uncle owns 2 local businesses, has outstanding credit, and has paid back every loan he's gotten from the local Regions bank. He took a look at our business plan a couple weeks ago, pointed out a few things that should be changed/worked on, etc. and gave it another look yesterday.
He said he's very confident that we'll succeed and he's agreed to go to the bank Monday with us, and co-sign on a business loan for us.
What do you think are chances are of getting this loan with his signature?|||Here's the reality: when applying for a business loan, the business plan is NOT the first thing banks want to see. Sometimes, they won't even bother to read it
What banks want to see are:
- demonstrated ability of the business to generate revenues -- businesses that are already operating and have at least 2 years' worth of financial statements that demonstrate strong profitability. Business ideas are just ideas; not proven to generate profits
- ability to repay the loan through collaterals and assets
- solid management team: they want to know that the business will be run by someone who knows what they are doing
- excellent credit history (Upwards of 650)
- your investment in the business: they want to see that you believe in your business enough to put down your own money into the business
If you have the above, then prepare a business plan. You need a good executive summary (as that is what they're most likely read, if at all) PLUS solid, realistic financial projections/plans
What you need to ask from your uncle is not just a review of the business plan, but to guarantee the loan. Then you might be able to get the loan
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