Week Two Discussion Questions
· Visit the website of your favorite U.S. Company. Find the company’s financial statements in the section of the website for investors. Post a link to the statements. Compute two ratios from each type, including liquidity, solvency, and profitability. What do these ratios tell you about the financial status of this company?
· Refer to Ch. 3 of The Successful Business Plan. What components would you include in your business plan to gain the attention of the loan officer at a commercial lending financial institution? What makes these components important?
· Imagine you are a loan officer presented with a loan package from a start-up company and one from a well-established company. What specific components would you require in the start-up company’s loan package to approve the requested loan? How do your lending requirements for the start-up company differ from those for the established company applying for a loan?
· An effectively organized loan application reduces the time spent waiting for a response to a loan request. According to John Nelson III, SCORE counselor in Rhode Island and vice president of a major U.S. bank, "in about 80 percent of the cases, the formal request is not complete" (U.S. Small Business Administration, n.d.) What factor, or factors, in your opinion, contributes to this high percentage of incomplete loan packages? What strategies do you recommend to overcome each of the factors identified?
U.S. Small Business Administration. (n.d.). Finance Start-Up. Retrieved from http://www.sbaonline.sba.gov/smallbusinessplanner/start/financestartup/SERV_LOANPACKAGE.html.