Business Plan and Loan Package
Running head: TOOTSIE ROLL INDUSTRIES, INC. LOAN PACKAGE
Tootsie Roll Industries, Inc. Loan Package
ACC561
22 September 2011
Introduction
Now that the small business idea has become more that just fine print, it is time to put together a loan package that explains the story of the company. There are important questions to answer, demonstrating the company’s ability to correctly make important financial decisions, and detail how the business will pay off the loan. This paper will include the requirements of a loan package, creditor requirements, a ratio analysis, loan justification, and how the company plans to use the proceeds.
Tootsie Roll Industries, Incorporated Loan Package
Loan Package Requirements
Like a job application, the business will start the loan package with a cover letter as well as an updated business plan. A description of the company’s history, vision statement, market, products and services, the management, the reason for the loan, how it will impact the business, and method of repayment is also required.. The United States Small Business Administration (SBA) requires the business owner to complete an Application for Business Loan, “SBA Form 4” (www.sba.com) that will be completed by the lending institution. A personal background information statement also needs to be completed on SBA Form 912. Bank loan officers require financial statements assembled by an accountant that include three to five years of balance sheets, income and cash flow, and audits. Tax returns are also required that authenticate the company numbers. According to Robyn Barrett, managing member of Factors Southwest which is an alternative lender says, “do not put a package together until your taxes are done”. (www.factorssouthwest.com). 90 percent of the lenders’ decisions are based on tax returns and financial data. Forecasts or projections included in the loan package should consist of at least three to five future years or the
Tootsie Roll Industries, Inc. Loan Package
ACC561
22 September 2011
Introduction
Now that the small business idea has become more that just fine print, it is time to put together a loan package that explains the story of the company. There are important questions to answer, demonstrating the company’s ability to correctly make important financial decisions, and detail how the business will pay off the loan. This paper will include the requirements of a loan package, creditor requirements, a ratio analysis, loan justification, and how the company plans to use the proceeds.
Tootsie Roll Industries, Incorporated Loan Package
Loan Package Requirements
Like a job application, the business will start the loan package with a cover letter as well as an updated business plan. A description of the company’s history, vision statement, market, products and services, the management, the reason for the loan, how it will impact the business, and method of repayment is also required.. The United States Small Business Administration (SBA) requires the business owner to complete an Application for Business Loan, “SBA Form 4” (www.sba.com) that will be completed by the lending institution. A personal background information statement also needs to be completed on SBA Form 912. Bank loan officers require financial statements assembled by an accountant that include three to five years of balance sheets, income and cash flow, and audits. Tax returns are also required that authenticate the company numbers. According to Robyn Barrett, managing member of Factors Southwest which is an alternative lender says, “do not put a package together until your taxes are done”. (www.factorssouthwest.com). 90 percent of the lenders’ decisions are based on tax returns and financial data. Forecasts or projections included in the loan package should consist of at least three to five future years or the
References: Kimmel, P., Weygandt, J., & Kieso, D. (2009). Accounting: Tools for business decision making (3rd Ed.). Hoboken, NJ: John Wiley & Sons. Tootsie Roll Industries. (2011). Tootsie Roll Industries Annual Report 2010. Retrieved from http://www.tootsie.com/ financial/fin_203.pdf