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FINANCIAL RISK
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The financial analysis is quite straightforward. This is where most experienced lenders will focus. To be blunt, most lenders are “bean counters.’ At the end of the day, it is the numbers in your business plan that will make or break your chances of getting a loan approved. In many cases, the senior credit adjudicator will go directly to the financials provided before even looking at your request. Therefore, the figures you provide must be realistic and arguable. You should be prepared to justify MASUCCESS
each of the figures you have provided in your business plan and explain how these figures were obtained. You will also have to contend with standard financial ratios lenders use. These are working capital (your business’ immediate efficiency and short-term finances), debt/equity (total liabilities divided by equity), “CapEx” or capital expenditure (money you’ve spent to maintain or improve your physical property), retained profits (net income left over after paying shareholders), as well as gross profit margins (the total amount of money you have made, minus the cost of the expenses it takes to run your school).
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