Youve finished your business plan, and it is good. You now have your life back, and can sit in anguish while you wait to hear from the bank. Except no - they need more stuff from you. Some legal documents, names, resumes, etc. It sounds like you forgot to put together an appendix.
The appendix to your business plan is where you put all the stuff thats relevant, but not necessarily for everybody to see. You dont include it with the plan itself, because that thing gets around. You create a separate document for the appendix, mark it as confidential information, and let lenders know that it is available upon request.
And they will request it, because it contains highly pertinent information like:
Credit Histories
If theyre contemplating giving you money, they want to know whether you have a history of repayment or default. It makes sense. So include your business credit history, as well as your own. If you run a partnership, include your partners history as well. The reasoning behind this is that even though your business credit may be great, they want to know that youll step up and make the payments if things get tough. Also, new businesses may have little or no credit at all, so the personal histories of the key players are all there is to go on.
They also like to see letters of reference from relevant interests - recommendations from vendors or others who have extended you credit go over well.
The Important Folk
Your appendix should include the resumes of the key people in your management structure, as well as any outside consultants you use (accountant, etc). This is because the lender is considering giving you money based on the soundness of your business and the likelihood that it will make money. They like to see that the people in charge know what they are doing, and have experience and quantifiable results in the field.
To be clear, the resumes dont have to be directly related to the product as long as they are related to the person's function within the company. If the resumes are less than stellar, not including them doesnt get you a free pass. The bank will ask for them if they want them, and your refusal would send up a red flag.
The Product
The lender wants to know what it is youre selling. You should have already convinced them of your products place in the market, in the body of your business plan itself, but adding additional information to the appendix really drives the point home. You should believe in your product, so why not show it off? Include pictures, details from your market analysis, press clippings, patent applications, anything and everything that can answer potential questions. The person reviewing your file should not have to call you for additional information. Lay it all out right there.
Legal Documents
Finally, the lender wants to know that your business is legit, and that you have all your ducks in a row. Include copies of your lease, business license, building permits, contracts and incorporation papers. Any legal document that pertains to the structure and operation of your business is fair game. If youre not sure whether to include something, include it. If they dont need it, theyll overlook it - better that than setting the process of your application back a week while you gather the additional documents theyve requested.
Altogether, your business plans appendix may turn out to be quite a hefty document in its own right - but at least you didnt have to write it all like you did with the plan. Its mostly photocopying. If you had a difficult time gathering all the pieces, its a sign that you need to get organized - thats something you can do while you wait for your loan to get approved.
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