1. MGT601 SME MANAGEMENT

2. Guide Lines for Approaching Lenders – II
Lesson 21
Guide Lines for Approaching Lenders – II

3. Chapter Learning Objectives
This Lecture deals with:
What a Bank Needs to Know About You
General Credentials
Checklist for a Career Profile
Financial Situation

4. General Credentials 1. Letter of Introduction
A short letter, setting out your achievements and testifying to your good character and integrity, is a traditional method of introduction.
Its effect will be positive if the referee is a person well regarded in the business community.

5. 2. Your Profile
This is a resume or curriculum vitae, setting out your educational achievements, professional training, qualifications and experience, and your employment record and achievements.
It is a helpful introduction to you and need not be longer than a page or two.

6. Continued…..
If you are a newcomer to the business community, your profile will help your bank to assess your capacity for conducting trade, producing goods and services for export, and managing people.

7. Continued…..
You may also want to attach to your profile any certificate or reference from former employers if you feel this will help to show up your experience and capacities, especially if the employer is known and respected, and has written favorably about you.

8. 3. Brochure on your business
This should state what business you are in, what your products are and how long you have been trading.
A list of clients or customers will be very helpful.

9. 4. Bank and other references
If you are approaching an institution that is not your current bank, it is important for you to provide bank references that will enable the person you are discussing with to check your credentials, particularly with regard to regularity of payments, past borrowing record and general standing.
You may also give the names of your accountants and lawyers if this is helpful.

10. 5. Proof of company ownership or registration
You may be asked to provide evidence that the company in whose name you want to borrow belongs to you or has been duly registered.
You may also be required to provide a sworn list of assets and liabilities in the absence of audited or approved accounts.

11. Checklist for a Career Profile or Curriculum Vitae
Keep the profile or CV short – one to two pages at the most. Focus on significant information. Avoid too much detail. Your professional experience is most important part of the profile. Present your profile in the order suggested below.

12. Checklist for a Career Profile or Curriculum Vitae….
Name
Personal Details:
Education and qualifications:
Professional experience:
References

13. Financial Situation
A lender will most probably expect you to produce up-to-date financial information on your business.

14. Continued….. The standard financial reports you should have are:
Balance Sheet,
Profit-and-Loss account,
Cash-Flow Statements

15. Budget for the Current and Coming Year
This document should show your projected sales and revenues for the current period or the coming year, as well as your operating costs and overheads.
You should also have a separate paper showing your planned capital expenditure.

16. Continued….
Your budgeted (or estimated) revenue should be sufficiently detailed to be creditable. In other words, the figures must not be simply wishful thinking but based on firm and tentative orders to which you may add orders anticipated on the basis of past performance.

17. Thanks you
Happy Learning,
Keep Learning