Your business loan proposal will consist of the pro forma, startup costs, business narrative, personal financial statement, and personal salary & budget.
The business loan narrative is the equivalent of a cover letter for a resume. It allows you to put character and personality into your business plan, which will complement the numbers that you have generated in your pro forma.
My loan narrative included the following items:
I talked about how the demand for ophthalmologists is expected to grow significantly as the baby-boomer generation enters it’s golden years. Basically, I wanted to show that ophthalmology, as an industry, will continue to have growing demand and an unmet need.
The core philosophy of my practice, and the sets of values upon which I will build my practice.
Self-explanatory. Talk about yourself.
I listed the types of services I planned to provide (ie. cataract surgery, treatment of diabetic retinopathy, glasses). I also described my business hours, and how it will be divided between clinic, surgery, and administrative hours. You can also talk about your personnel and staff in this section as well. (I didn’t)
I discussed my demographic analysis and my competitors. I also talked about which hospitals I planned to be on staff, who the potential referring doctors are, and the marketing strategies I planned to apply to these professionals and patients.
I described my timeline for opening my practice, and what I planned to do until then. I said I would work as a part-time medical ophthalmologist.
I described how I would repay my loan if my practice crashed and burned. I wanted to instill confidence to the bank that I would be capable of making my monthly payments even if the practice went under. I said I would associate in some rural part of the country, and would live like a college student until I had paid off my debts.
I acknowledged my consultant’s role in the startup. I also announced my plan to be on all insurance carrier plans by opening day.
This is how much money you will need to get the practice running. You will have calculated this amount through your business plan, and will include initial expenses and working capital.
These are the terms of the loan I would be requesting. We’ll go over this subject on a later post.
In addition to these sections, feel free to include any other pertinent information you would like to discuss.