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2.6 Loan Summary Analysis

Anthony, Christine and Sofia of Spotless Homes are looking to secure a term loan in the amount of $17,100 from a local lender in Marietta, Georgia. All three owners have excellent credit history. Christine actually has her home equity loan with the same lender. The business owners are anticipating that they will be charged 8% interest, given the nature of the business. They also anticipate that they will be approved for a 4 year term loan but will not be disappointed if the bank was to approve them for a 3 year loan either. Monthly payments for the loan are projected to be $417 which will result in an annual principal and interest expense of $5,010 to the business.

The owners are also aware that in the small business world, almost all business loans secured in the name of a company have to be backed by the personal guarantee of the business owners. These kinds of loans are called 'Full Recourse' loans and what that means if that the borrowers are personally and jointly liable for the outstanding principal and interest on the loan - if they were to default on their payments, the bank could go after their individual personal assets.

In the event the lender only approves part of the loan or denies the loan, Anthony, Christine and Sofia are ready, willing and able to contribute the $17,100 needed directly from their personal savings.

Quick Links:

  1. Go to the Corresponding Template section for this industry.
  2. Go to the Corresponding Questionnaire section for this industry.

Small Business Owner Resource Center


Articles on the Small Business Financing Sources, the Small Business Loan Basics, small business loans Checklist and SBA Loans are incredible sources of knowledge for the small business owner.



Credit Report and Credit Score Analysis, how to Read a Personal Credit Report and all about Business Credit cover the intricacies of credit and are required reading for everybody.



The Foundation Grant Directory is a free listing of sources for grants by state. Why not look if there is some free money out there for your business. Hey - you never know!



The Business Loan Application covers every item you will need in your loan package and tells you how to get approved for business loans.



Fire your loan broker and use our Free Business Loans Bank / Lender Directory to find every bank in the country lending to small businesses.



If you are looking to start a business - look no further.  Check out the Free Incorporation Guide discussion and the State Incorporation Resource Directory.

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