tag:blogger.com,1999:blog-86054940850947374642024-03-13T08:09:06.351-07:00Create Your Own Pizza Shop Business PlanNikki Leighhttp://www.blogger.com/profile/00985309338453728557noreply@blogger.comBlogger1125tag:blogger.com,1999:blog-8605494085094737464.post-34396076547333378732009-04-06T10:09:00.000-07:002009-04-06T08:30:49.856-07:00Advise From A Business Banker About Securing Pizza Shop Financing<span style="font-size:100%;"><span style="font-family:arial;">When I was writing </span><span style="font-style: italic;font-family:arial;" >How to Open a Successful Pizza and Sub Shop</span><span style="font-family:arial;">, I talked with a local business banker that I've dealt with over the years. I've always been a firm believer that people need a solid and thorough plan before beginning any project - that is even more important when getting ready to open a business and especially when the person needs to secure a loan. This is the advise he offered - I think it will be beneficial to you.</span><br /><br /></span><br /><br /><p class="MsoBodyText2" style="line-height: normal;font-family:arial;"><span style="font-size:100%;"><b style="">Commnents From A Professional -<br /><o:p></o:p></b></span></p> <p class="MsoNormal" style="font-family:arial;"><span style="font-size:100%;">In order for a bank to even consider financing for a business loan such as a pizza restaurant, the first step is to have good personal credit.<span style=""> </span>If you have previous credit issues that have lowered your credit scores, make sure you are prepared to either hear, “No,” or “Please explain this (these) credit mark(s).”<span style=""> </span>If you have not demonstrated the ability to manage your own personal finances then most likely you will not have the opportunity to manage the financing from a bank for a business.<span style=""> </span>When you make the initial contact with a bank, ask to speak to a commercial loan officer.<span style=""> </span>Other types of loan officers include consumer (think car loans) and mortgage (think home purchases and home equity loans).<span style=""> </span>The commercial loan officer will be able to provide a list of things you will need to give him/her in order to consider the restaurant financing.<span style=""> </span>Information required for a new business most likely will include the following:<o:p></o:p></span></p> <p class="MsoNormal" style="font-family:arial;"><span style="font-size:100%;"><o:p> </o:p></span></p> <ul><li><span style="font-size:100%;"><span style=""> </span>Personal financial statement (Assets – Liabilities = Net Worth)<o:p></o:p></span></li></ul> <ul><li><span style="font-size:100%;"><span style=""> </span>Personal tax returns (two years)<o:p></o:p></span></li></ul> <ul><li><span style="font-size:100%;"><span style=""> </span>Business Plan<o:p></o:p></span></li></ul> <ul><li><span style="font-size:100%;"><span style=""> </span>If leasing property, copy of the lease agreement<o:p></o:p></span></li></ul> <ul><li><span style="font-size:100%;"><span style=""> </span>If purchasing property, copy of the sales contract<o:p></o:p></span></li></ul> <ul><li><span style="font-size:100%;"><span style=""> </span>Personal History / Resume (may not be required but is very helpful)<o:p></o:p></span></li></ul> <p class="MsoNormal" style="font-family:arial;"><span style="font-size:100%;"><o:p> </o:p></span></p> <p class="MsoNormal" style="font-family:arial;"><span style="font-size:100%;">If an existing business, add the following to the list above:<o:p></o:p></span></p> <p class="MsoNormal" style="font-family:arial;"><span style="font-size:100%;"><o:p> </o:p></span></p> <ul><li><span style="font-size:100%;"><span style=""> </span>Business tax returns (two years)<o:p></o:p></span></li></ul> <ul><li><span style="font-size:100%;"><span style=""> </span>Copy of State Corporation Commission Certificate<o:p></o:p></span></li></ul> <ul><li><span style="font-size:100%;"><span style=""> </span>Copy of Federal Tax Identification Number or Employer Identification<span style=""> </span>Number (EIN)<o:p></o:p></span></li></ul> <ul><li><span style="font-size:100%;"><span style=""> </span>Copy of Articles of Incorporation (if corporation)<o:p></o:p></span></li></ul> <ul><li><span style="font-size:100%;"><span style=""> </span>Copy of Operating Agreement (if partnership)<o:p></o:p></span></li></ul> <p class="MsoNormal" style="font-family:arial;"><span style="font-size:100%;"><span style=""> </span><o:p></o:p></span></p> <p class="MsoNormal" style="font-family:arial;"><span style="font-size:100%;">One common mistake a new business owner often makes, with regard to financing, is that one loan will cover all the financing needs.<span style=""> </span>This is typically not the case and can lead to cash flow problems that could result in default on the loan, which is not what the lender or borrower want.<span style=""> </span>In most cases, either two or sometimes three separate loans would be appropriate.<span style=""> </span>For instance, if one is purchasing real estate then a long-term mortgage loan would be appropriate to finance that purchase.<span style=""> </span>However, the pizza restaurant may need to purchase equipment and have cash available monthly to meet payroll and purchase rolling inventory.<span style=""> </span>An equipment loan could take the form of a five or seven year loan with a fixed monthly payment much like a car loan.<span style=""> </span>A line of credit, on which one would pay interest monthly on the outstanding balance, may be prudent for short-term cash flow purposes.<span style=""> </span>All three should be addressed in the business plan and discussed with the commercial loan officer..<o:p></o:p></span></p> <p class="MsoNormal" style="font-family:arial;"><span style="font-size:100%;"><o:p> </o:p></span></p>Nikki Leighhttp://www.blogger.com/profile/00985309338453728557noreply@blogger.com0