What do I need to get a loan ?
If we assume that the loan is for business use then the lender will most probably will want to see last audited or certified accounts (at the last year end) + latest management accounts + projections for the future.
The lender needs to ascertain that you have a solid business and can service the loan you are about to take on.
The last audited or certified accounts could be up to a year out of date, so that is the reason for the need for up to date management accounts.
This gives the history – the forecast gives the future.
Every loan costs money. The yardstick to measure the borrowing would be that there is no point borrowing five thousand pounds costing five hundred pounds a year in interest if you only add four hundred pounds to your profit.
Lenders will look for a return for you in excess of costs to you. It sounds so logical but there are many loan requests that don’t even pass this simple criteria.
The forecast needs to be both in terms of Profit and Loss and Cashflow and also the effect of the borrowing on your balance sheet.
Get a good pro-active accountant to assist.
