subject: Apply For A Business Loan - Use An Executive Summary First [print this page] Sometimes any entrepreneur gets delayed or procrastinates when going for funding for any type of project because they don't want to write a full business plan, complete an application, etc.
I sometimes tell them to create a quick, easy executive summary and send it to the key lenders to see if they "have an appetite" for the deal to begin with, therefore, spend a little more time upfront and then you can address some questions or issues before you've spent too much time or resources.
Here is a quick example of an actual executive summary I recently used. I had multiple Letters of Intent and Proposals. Obviously here I have removed some information and changed personal information but you can see that the format isn't too tough for anyone to use.
This will help get your foot in the door, then you can spend time on the business plan, projections, application, or whatever is needed.
Often a simple memo-style summary is best.
Subject: Short Term Loan request to purchase a golf course with Restaurant, Bar/Grill, Liquor license, full supply of golf carts, Equipment shed
Purchase price $1,000,000. $75,000 deposit paid.
Borrowers will bring $450,000 equity injection.
1. Legal name of all guarantors : Spy Der Man
2. Legal name of borrowing business: Webstuff or Entity To be formed
3. Mailing address of borrowing business: M.J.'s apartment
4. Address and details of collateral (properties):
* Appraised at $2.12 million in 2007
* Restaurant/Grille/Bar with liquor license, pro shop, golf carts, equipment, FF&E, TURNKEY
Describe the property as it is today. Include physical description, gross and net operating income, problems and challenges, advantages and features.
5. Executive Summary - Brief history if applicable.
Plan: What you are going to do. A few sentences highlighting the plan to invest money, increase cash flow, sell the property or refinance.
Financials: A simple pro forma like gross income, operating expenses, net operating income, on a pro forma basis, for the next few years.(I often attach some financials and other details)
6. Resume - Give specifics about you or your partners' experience and how it correlates to the jobs and responsibilities of this project. Who are you? What your experience is. Hopefully specific, relevant experience in the asset class and the asset size that you are talking about. If not, you better get someone else to also put down here.
7. Detailed use of proceeds - How much you need. How much you have. Where you get it. Where you will get it. What you will do with it when you get it. Again, only a few sentences are fine.
(break down any costs or fees, or uses here in detail)
8. Exit strategy - cashflow from other businesses, cashflow from the operation of the new facilities, golf course, restaurants, grill, pub, banquet room, activities, possible sale of home sites, etc., refinance with permanent take out.
More detailed but only a few sentences. The exit strategy is often the most neglected part. It is how the investor or lender will get out. You must have a plausible reasonable exit. And this is either selling the property or refinancing with permanent financing. If you want to refinance you have to show that the property will be eligible for permanent financing that is available today, not two years from now on a hope and a prayer.
