Mergers & Acquisitions Advisory

A Neumann & Associates, LLC

April 27, 2020

Financing Your Business: A One-Stop Guide!

By Achim Neumann

Starting a new business or acquiring an existing one often requires arranging some level of financing through a bank loan. This need for extra cash will often mean going to your bank manager to present your business proposal. Since you will probably only have a single chance to convince a lender that your business model is a viable plan for generating profits, you should prepare yourself meticulously before the meeting to make sure you leave with what you want. This means putting together a solid business plan and loan proposal which is backed up by detailed monthly financial projections for the first five years. Additionally, you will need to gather up and present your historical financial statements and tax returns to persuade the lender that you are a trustworthy loan candidate, and that you are likely to provide them with a sound return on their investment.

What many loan applicants do not realize is that lenders use a strict set of assessment criteria called the “5 C’s of credit” when making a decision to accept or reject a loan application. If your proposal does not stack up in one of the five areas covered in the criteria, it is highly likely that you will fail to gain the financial backing you desire.

The “5 C’s” of Credit


(Will you have enough working capital to carry out your business plan?) – Included in your business plan must be proof that you will have enough liquidity to cover 3-6 months’ worth of running expenses from the moment that the business is started up or purchased. Lenders will be far from impressed by indications of financial imprudence or unrealistic projections regarding future running costs and how they will be met.


(Capacity for loan repayment) – Lenders will need to see a concrete timeline detailing where the money is going to come from to pay back the loan. Being opaque when it comes to dates and figures is a sure-fire way to give a lender cold feet and put the brakes on your plans. Make sure you cover all bases – work on possible exit strategies for the short- and long-term and think of backup plans for every possible eventuality.


(The character and capability of the loan applicant) – While you are presenting your proposal, lenders will be looking for evidence of your management ability, commitment, sense of obligation to repay, personal credit history and business track record. You will need to work hard to show the lender that you have what it takes to be successful enough to put yourself in a position where you can repay the investment.


(pledged assets to protect the interests of the lender) – Most loans will require a down payment as a precondition for approval, but lenders also like to see that applicants have extra assets which can be transferred as an alternate means of repayment should things not go as well as expected and you cannot keep up with repayment dates.


(Market, geographic, industry, economic) – You will need to demonstrate that you have an in-depth insight into the current market conditions in the sector in which your business will be operating. Leave no stone unturned in your research as underestimating the knowledge and experience that your lender may have in your industry is a common mistake which leads to rejection.

What follows is a checklist of documents that are required in order to qualify for an SBA (U.S. Small Business Administration) loan. Depending on the specifics of your proposal, it is also likely that you will also be asked to submit further documentation to prove your credentials.

Business Loan Checklist

  • Loan Proposal/Business Plan – The 5c’s of Credit
  • Company Information — Name, company registration, tax ID number, certificate of ownership, earnings and/or cash flow projections for the next 1-3 years, and a copy of the proposed Franchise Agreement and current Franchise Disclosure Document (FDD).
  • Supporting Documents — Copies of purchase contracts, quotes and/or invoices, recent appraisals or other information relevant to your application (e.g. copy of existing or proposed property lease).
About A Neumann & Associates, LLC

A Neumann & Associates, LLC is a professional mergers & acquisitions and business brokerage firm having assisted business owners and buyers in the business valuation and business transfer process through its affiliations for the past 30 years. With an A+ Better Business Bureau rating, the company has senior trusted professionals with a deep knowledge based in multiple field offices along the East Coast and has performed hundreds of business valuations in its history. The firm’s competitive transaction fees are based on successfully completing transactions. For more information, please contact A Neumann & Associates at 732-872-6777 or

Comments are closed.

Any questions? Please contact us at 732-872-6777
Call Now

Client Testimonials

“I had been in touch with Karin and Gary from A Neumann & Associates regarding some opportunities and was looking forward to meeting with them. Hence, when they organized a seminar in Princeton, NJ, I was quick to sign up. The seminar was very informative as the team walked the attendees through various scenarios and referenced real life buying/selling situations they had been through. The sessions by Gary, Karin and Achim were crisp and focused and brought clarity to potential seller and buyers. I strongly recommend the team and look forward to continue working with them.”

Gaurav Tyagi

“Thank you for your Event on "How to value, Sell, and Buy A Business for Maximum Profit" and the insight into ANA’s approach on what is involved in the Business Exit for sellers. Garys Hervieiou's "Business Valuation", Achim's "Deal structure" presentation and Karin’s "Preparing the Package" are real street knowledge shared. They answered attendees questions which makes it more interesting for learning from others. Great for small businesses like us. The presentations were totally worth our time and travel for the event to Princeton, NJ from Rockville MD. Ravi Bhutani, President, CIPS”

Ravi Bhutani

“Gary, this is to thank you for an excellent job done in selling our business. We could never have done it without your professional expertise, dedication and time put in without reservation to make it happen. We will gladly and highly recommend you to anybody in our position.  It was a pleasure to work with you.”

Pat Iammatteo, Owner

“Your vetting is simply outstanding, among the best I've seen from a broker.”

Eric H., Investor

“I recently contacted A. Neumann and Associates about getting a valuation of my business done. I spoke with Marc, who explained the process in detail. After meeting with Marc in order to get a clear understanding of my business, and what I was hoping to accomplish. His patience in answering all my questions and his knowledge of the proper way to market my business gave me great confidence that this is the firm I will be using to sell my business for max value. Working with Marc at A Neumann & Associates was very easy and professional. I did not know all that was going to be involved in selling my business but they helped me through the process. What I thought was going to be a just another one of those pushy sales companies was just the opposite. Polite, knowledgeable, and a pleasure to talk to and deal with. I highly recommend this firm to anybody who wants to sell now or down the road. Marc not only knows his stuff, but actually is a real nice guy.”

Double Diamond

“Used A Neumann & Associates to sale my business. could not imagine having done it with out the patience and experience Gary provided. Thanks Gary,”

Dennis Frazier

“Working with Marc and his company was a pleasure. What I thought was going to be a just another one of those pushy sales companies was just the opposite. Polite, knowledgeable, and a pleasure to talk to and deal with. Marc handled most of the interaction and he has one of the greatest demeanors. Again, it was a pleasure working with him and his firm.”

Douglas DiCeglio

“I recently completed an acquisition using A Neumann & Associates. Tony Valentino was very helpful and accessible during the entire process. They do a thorough job vetting both parties and got us to the finish line.”

Srini Mudambi

“Claus out of Florida helped us with the sale of our business. We had never done anything like this and him and his team walked us through the process from start to finish. We had some challenges through the process and Claus continued to show up even in the difficult conversations.”

Colby Harris, Co-Owner, Del Mar Designs

“Claus Madsen thoroughly helped us with selling our company. From the 1st introductory meeting explaining to us what was possible, to providing us with resources to assist with the sale. Claus was invaluable throughout the whole sales process. Claus was with us every step of the journey and always made himself available for any questions or issues that came up along the way. If you are interested in selling your business, I encourage you to reach out to Claus and the ANA team so that they can let you know what’s achievable. These guys will make it happen!”

Ron Harris, Co-Owner and Vice President, Del Mar Designs
view all testimonials

Contact A Neumann & Associates, LLC

If you are considering selling your business, please contact us to learn more about our comprehensive service spectrum. Our experienced professionals will answer all your questions about selling a privately held business in complete confidentiality. Please fill out our contact form, or call us at 732-872-6777. We will contact you directly and will never identify ourselves to your employees.

call us now
Contact Us for a Free, Confidential Consultation

Experienced M&A Advisors available

Full Name
Email Address
Phone Number