If you do, you should know the ground rules for successful loan applications. A good business plan requires a lot of time and effort, but is well worth it. The lender will want to see some realistic cash flow figures not only for repayment of the loan, but for the actual operation of the business as well. If you don't, the lender may doubt your ability to pay the note on the loan. This issue must be resolved before he or she can continue discussing the loan with you.
Cash flow is the heart of the matter for a new business.
The lender will want you to show a projected financial plan covering at least a year, but preferably three years. The projections include sales, cost of sales, and general administrative expenses. These are the fixed expenses you'll incur whether or not you're making any money, such as rent and utilities. The lender wants to know if you can cover those expenses without any sales revenue. With your projected financial plan in hand, the lender can make a reasonable determination of what your cash flow must be to stay in business.