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Resource Center:
The following criteria is what Beacon looks for in a potential borrower:
- Demonstrated management ability/experience
- Creditworthiness as evidenced by an acceptable business and personal credit history
- Adequate investment.
- Ability to repay based on projected cash flows and profits
- Adequate collateral, which can consist of:
- Real estate and improvements typically up to 75% of the appraised value.
- Machinery and equipment typically up to 75% of cost (or of appraised value and economic life for used equipment).
- Accounts receivable and inventory depending on the marketability of inventory and prior collection history of receivables.
- Personal guaranties. Parties with a 10% or more ownership are required to guarantee the loan.
If you need to prepare a loan proposal, a complete, well-organized presentation will expedite your loan approval process. We will need the following documentation to evaluate your loan request:
- Business profile. A document describing type of business, annual sales, number of employees, length of time in business and ownership.
- Loan request. A description of how loan funds will be used. Should include purpose, amount and type of loan.
- Collateral. Description of collateral offered to secure the loan, including equity in the business, borrowed funds and available cash.
- Business financial statements. Complete financial statements for the past three years and current interim financial statements.
- Personal financial statements. Statements of owners, partners, officers and stockholders owning 10% or more of the business.
The strength and accuracy of your financial statements will be the primary basis for the lending decision, so be sure that yours are carefully prepared and up-to-date. The most important documents in your financial statements are:
- Balance sheets from the last three fiscal year-ends.
- Income statements revealing your business profits or losses for the last three years.
- Cash flow projections indicating how much cash you expect to generate to repay the loan.
- Accounts receivable and payable agings, breaking your receivables and payables in to 30-, 60-, 90- and past 90-day old categories.
- Personal financial statements from you and your business partners listing all personal assets, liabilities and monthly payments, as well as your personal tax returns for the past three years.
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