I NEED $2 MILLION DOLLAR BUSINESS LOAN
Aren’t we all! First things first, be realistic. The question you need to ask yourself is not how to get a 2, 5, 10, 20, 30-million-dollar business loan, but is my business cash flow could support the payments on such a loan in the long run. At the very least, with good credit and a long term (north of 10 years), you’ll be looking at medium to high 5 digits monthly payments.
Ask yourself:
Will I be able to double the loan money or flip it so that it’ll generate the cash-flow to support the monthly payments and then some?
Do I need the money to acquire commercial real estate and renting out all units, or will I buy a new machine or product that will increase sales?
Are my accounting books in great shape?
If you’re still here, here’s the breakdown of how to get a multi-million-dollar loan and what is needed in order to qualify.
Client seeking $1,000,000 – $40,000,000 in capital should have:
- American Citizenship or permanent resident card.
- Business registered within the United States.
- Minimum Annual Gross Revenue – $2,000,000 (around 1.5M won’t be a deal-breaker).
- Minimum FICO – 600.
- Minimum Time in business – 2 years (shorter term can be evaluated but above a year is a must).
- Startups can qualify if they are acquiring equipment, real-estate, other companies, etc. Tangibles that can be collateralized.
- Industry: All industries can qualify.
HOW TO GET A $10 MILLION DOLLAR BUSINESS LOAN?
APPLICATION PROCESS:
In order to get your request reviewed, have the following items ready:
- Filled out Application.
- A detailed explanation for the use of Proceeds, or Detailed Financial Request.
- Last 3 years Business Tax Returns (if extension was filed on previous year, produce a copy of the extension).
- Year to Date Income Statement and Balance Sheet.
- Contracts and/or Purchase orders.
- Most Recent Accounts Receivable/Accounts Payable Aging (if applicable).
- Debt Summary Schedule (see below).
- Personal Financial Statement (see below) (for all owners 20%+).
SALES CYCLE DESCRIPTION:
Once you’ve gleaned all the information above, you’ll need to write a detailed explanation of the business’s Sales Cycle Description (Production Process, Sales Cycle & Billing).
Here is an example of how a sales cycle should be expressed either through spreadsheet or narrative (if your sales cycle is completely different, that is perfectly fine). Just describe it as so:
- Our typical lead time on finished goods is “4-6 weeks from receiving a confirmed purchase order.”
- Our Sales cycles vary depending on whether “we produce finished goods or supplying raw products.”
- Customers payment terms: “new customers are required to pay in full upfront.” “Existing customers with an approved credit application can enjoy 50% of payment upfront and 50% upon delivery.” “After a few successful transactions, payment terms may go up to 30 days net basis.”
- Finished/Packaged goods:
- Day 1 – “Containers of appropriate raw material are sent to packaging partners.”
- Day 2-5 – “Packaging for bottles, caps and other required components are ordered.”
- Day 15 – “Material and components have been received and cleared by Quality Control – packaging and production starts.”
- Day 25 – “Packaging is completed and testing on final product begins.”
- Day 32 – “Tests are completed, and final product is shipped to client.”
SUBMISSION PROCESS:
- After you completed the application process and sales cycle and submitted both, a prospective lender will schedule an introduction call with you – the borrower.
- If the introductory call went well and both parties have decided to press on with the loan, the prospective lender will start structuring the facility immediately.
- The facility structure with all of the borrower’s supporting documentation will be presented to a credit committee.
- The credit committee will decree whether the structure is declined or confirmed.
- Upon confirmation, the prospective lender will issue you, the borrower, a non-binding letter of interest that outlines the specifics of the loan.
- Once you confirm your will to continue with the offered loan, the prospective lender will produce the formal term sheet and begin his due diligence & underwriting.
- Having completed underwriting, both parties will move to the closing process.
HOW TO PERSONAL FINANCIAL STATEMENT?
As part of the application process, you’ll need to fill out a Personal Financial Statement.
You can download a personal financial statement in excel form here.
Below, find a detailed explanation of how to correctly interpret all fields in the Personal Financial Statement:
INDIVIDUAL PERSONAL FINACIAL STATEMENT:
- Name: The full name of anyone registered as the business owner.
- Residence Address: The home address where the majority owner resides.
- Position or Occupation: What is the owner’s title (the person applying for the loan) – CEO, President, CFO, Board member, Manager, etc.
- Business Name: Full business legal name, not Doing-Business-As or Fictitious Name.
- Years in business: How many years has the business been operating under the current owner.
- Business Address: The main office. The main address from which operations are conducted.
- Phone: Home or mobile phone number of the owner.
- Phone: Business phone number.
- Credit Score: The FICO score of the owner or all owners if there is more than one.
ASSETS:
(All in dollars. Rounded numbers. No Cents)
- Cash on hand and in banks: Total liquid cash and assets. All Monies in all bank checking and savings accounts and under the mattress.
- U.S. Gov’t & Marketable Securities: Bonds, T-Bills, Stocks, Options, etc.
- Non-Marketable Securities: Any stocks, shares, bonds, IRA, 401k and other retirement accounts etc. you own that are not traded on the major or secondary markets – Over the counter market, Cryptocurrency, etc.
- Securities held by broker in margin accounts: Stocks held in brokerage account where the broker lent you money to buy stocks.
- Restricted or control stocks: Unregistered shares of ownership in a corporation.
- Partial interest in Real Estate Equities: Any partial stake in real-estate ownership.
- Real Estate Owned: Any house, building, office space, or any other real estate registered under the business owner’s name.
- Loans Receivable: All monies owed by the owner of the business.
- Automobiles and other personal property: Any cars, boats, planes, luxury watch collection, gold, etc. Owned by the business owner.
- Cash value-life insurance: What is the cash value of business owner’s life insurance policy.
- Other assets: All other assets not mentioned above with cash value above $1,000.
LIABILITIES:
(All in dollars. Rounded numbers. No Cents)
- Notes payable to banks: Promissory notes, Convertible notes, all monies owed to banks from loans, obligations, or any other notes.
- Notes payable to banks – unsecured: all monies owed to banks on any loans, obligations, or notes that are unsecured by any type of property.
- Due to brokers: all monies owed to brokers either real estate or loans.
- Amounts payable to others – secured: all monies owed to any entity or person that are secured by a collateral, except for a bank; including, secondary alternative lenders, hedge funds, friends and family, etc.
- Amounts payable to others – unsecured: all monies owed to any entity or person that are not secured by a collateral, except for a bank; including, secondary alternative lenders, hedge funds, family and friends, etc.
- Accounts and bills due: amount of all unpaid business accounts-payable and bills due, if you owe money to electric company, gas, telephone, etc.
- Unpaid income tax: the total amount of all owner’s income taxes which are currently due but are unpaid. Liabilities or anticipated taxes should not be included for the current year.
- Other unpaid taxes and interest: the total amount of all owner’s taxes and interest payments on loans that are currently due but are unpaid.
- Real estate mortgages payable: total value due on all mortgage(s) payable on Real Estate. A complete breakdown of all mortgage(s) on Real Estate is required.
- Other debts: the total value due on all other liabilities not classified in the previous sections.
SOURCES OF INCOME FOR YEAR ENDED:
(All in dollars. Rounded numbers. No Cents)
- Salary, bonuses & commissions: the amount of owners’ total annual salary; including any salary from other companies, or outside employment.
- Dividends: total dividends paid to the owners from company in questions to other dividends from stocks or other companies.
- Real estate income: total amount of all real estate income received from the sale, rental, lease, etc. of real estate held by owner of company in question.
- Other income (Alimony, child support, or separate maintenance): total amount of any other income earned by the owner of company in question.
Income need not be revealed if you do not wish to have it considered as a basis for repaying this obligation.
PERSONAL INFORMATION:
- Do you have a will? If so, name executor – the attorney who will take care of your affairs after your demise.
- Are you a partner or officer in any other venture? If so, describe. Name any business or company that you partially own, or partner in.
- Are you obligated to pay alimony, child support or separate maintenance payments? If so, describe. If you’re in the midst of a divorce please include explanation of monies dispersed. Specify child support payments, alimony payments, and financial support given to your spouse when you become legally separated.
- Are any assets pledged other than as described on schedules? If so, describe. If your assets are placed as collateral on another loan other than what is described on the schedules, the specify it here.
- Income tax settled through (date). Enter the date of income tax settlements.
- Are you a defendant in any suits or legal actions? Specify on any lawsuits or legal actions you are part of.
- Personal bank accounts carried at: write the name/s and address/es of the bank/s where you conduct your personal operations.
- Have you ever been declared bankrupt? If so, describe. Specify whether your bankruptcies were rejected or accepted, including chapter 7, 11, 13, etc.
CONTINGENT LIABILITIES:
- Do you have any contingent liabilities? If so, describe: The total potential liabilities due as a result of being a co-signer for a loan or other commitments.
- As endorser, co-maker or guarantor? The total potential liabilities due as a result of legal claims from judgements, lawsuits, etc.
- On leases or contracts? Total amount of monies owed on leases of cars, or housing, or any contracts constraining the owner/s to any liabilities.
- Legal claims: the total potential liabilities due as a result of legal claims from judgements, lawsuits, etc.
- Other special debt: the total amount due on all remaining potential debts not accounted for.
- Amount of contested income tax liens: if you have any tax liens from IRS or franchise tax board that are contested.
ON U.S. GOVERNMENT & MARKETABLE SECURITIES:
You’ll have to supply the:
- Number of Shares Or Face Value (Bonds): The amount of shares you own combined.
- Description: are these shares in companies, stocks, or bonds.
- In Name of: on whose name are these shares registered on.
- Are These Pledged? have you taken a loan against the shares you own.
- Market Value: what is the current value of these shares.
ON NON-MARKETABLE SECURITIES:
You’ll have to supply the:
- Number of Shares: The amount of shares you own combined.
- Description: are these shares in companies, stocks, or bonds.
- In Name of: on whose name are these shares registered on.
- Are These Pledged? have you taken a loan against the shares you own.
- Source of Value: are these over-the-counter stocks, bonds, or other markets that might these securities are traded on.
- Value: the total value of these securities.
PARTIAL INTERESTS IN REAL-ESTATE EQUITIES:
You’ll have to supply the:
- Address & Type of Property: what is the address where the real estate property is located and what type of property is it, a house, a warehouse, commercial, building, etc.
- Title In Name Of: who holds the title to the said property.
- % of Ownership: if owner has partners or wife or family member holds part of the property then what is the percentage of ownership that the borrower owns in said property.
- Date Acquired: the exact date when the property was acquired.
- Cost: how much was paid to acquire the property.
- Market Value: what is the property market value today.
- Mortgage Holder: an individual or entity who owns the mortgage loan that was extended for this property.
- Mortgage Payment: how much is paid monthly to cover the mortgage loan on this property.
- Mortgage Balance: what is the balance left to repay this mortgage loan.
REAL-ESTATE OWNED:
- Address & Type Of Property: what is the address where the real estate property is located and what type of property is it, a house, a warehouse, commercial, building, etc.
- Title In Name of: who holds the title to the said property.
- Date Acquired: the exact date when the property was acquired.
- Cost: how much was paid to acquire the property.
- Market Value: what is the property market value today.
- Mortgage Holder: an individual or entity who owns the mortgage loan that was extended for this property.
- Mortgage Payment: how much is paid monthly to cover the mortgage loan on this property.
- Mortgage Balance: what is the balance left to repay this mortgage loan.
LIFE INSURANCE CARRIED, INCLUDING N.S.L.I (NATIONAL SERVICE LIFE INSURANCE) AND GROUP INSURANCE:
- Name of Insurance Company: who is the insurance company that insures this policy.
- Owner of Policy: the borrower, his wife, family members, etc.
- Beneficiary: wife, kids, dogs, etc.
- Face Amount: how much is the life insurance policy worth in case something happens to borrower.
- Policy Loans: the cash value of the life insurance policy as collateral.
- Cash Surrender Value: the actual amount of money you will receive if you terminate a permanent life insurance policy before its maturity date, or before you die.
ALL BANKS OR FINANCE COMPANIES WHERE CREDIT IS OUTSTANDING:
- Name & Address of Lender: the address where the bank or lender resides.
- Credit In the Name of: the borrower’s name unless the credit is under someone else’s name.
- Collateral: what is the asset/s that was put as collateral.
- Original Date: the date that the loan or line of credit was issued.
- Payment Amount: how much is paid monthly or weekly or daily to cover the loan or line of credit.
- Current Balance : what is the balance left on the line of credit or loan.
- Original Balance: how much as the total balance when the loan or line of credit was issued.
DEBT SUMMARY:
- Lender Name: the lender institution that issued the debt.
- Type of Debt: is this debt a loan, student loan, bond, car finance, debenture, medical debt, line of credit, government debt, personal loan, IRS debt, Franchise tax board debt, credit card debt, etc.
- Outstanding Balance: what is the balance left on this debt.
- Monthly Payment: how much is the payment on the loan.
- Interest Rate: the APR or monthly or daily interest rate.
- Maturity: if it’s a bond, if you’re paying only the interest on the bond and at a certain point you’ll have to pay the face value or a principal, when is the maturity date, when are you supposed to pay that big lump sum.
- Collateral: what is the asset that was collateralized on this debt.
- Additional Notes: any explanation you have to add.
With any questions of how to go ahead with a 6 -7 figures business loan, please comment below, or simply contact us.
Author
Asaf Antman is a pioneer of the alternative lending industry with more than two decades of extensive experience in the business world under his belt. Throughout his career, he dissected thousands of businesses; underwrote, analyzed, advised, negotiated debts, secured deals, and funded small to mid-size companies in a variety of industries and locations across the U.S.