The Advantages Of A Yur Business Plan

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2 cntents welcme... 3 what are the terms f the lan?... 4 the applicatin prcess... 5 n the lan... 6 Abriginal BEST prgram... 7 yur business idea... 8 yur experience... 8 yur micrlan request... 9 cnfirmatin f custmer demand (supprt fr yur prjectins) yur back-up plan yur business plan credit histry/repayment histry character references business lan applicatin persnal infrmatin persnal financial statement Page 2

3 welcme what is the Vancity micrlan prgram? At Vancity, we understand that small businesses are vital t the health f ur ecnmy, yet it can be difficult fr small businesses t find the prducts and services they need t get ff the grund r t grw. The Vancity micrlan prgram fills the gap between traditinal bank lending and the availability f venture capital by prviding small business lans t new entrepreneurs. Unlike traditinal small business lans that are based n business histry and cllateral, micrlans are based n the character f the wner and the strength f the business plan. eligibility requirements all wners/applicants must have successfully cmpleted the Abriginal BEST prgram at least ne wner/applicant has been perating r is abut t perate a business in Metr Vancuver, the Fraser Valley Reginal District, the Sea t Sky crridr, r Greater Victria what is the Vancity micrlan wrkbk? This wrkbk is the first step in the lan applicatin prcess. Cmpleting it will help yu assemble the dcuments required t meet Vancity s micrlan applicatin prcess. It will als help yu prepare fr an interview with a Vancity staff representative wh will gauge yur business-readiness. will the lan be apprved if this wrkbk is cmpleted? Cmpleting this wrkbk is an imprtant step in the lan apprval prcess and is nt the same as an apprval f the lan. The cmplete lan applicatin including this wrkbk, the requested dcuments, yur credit histry, yur equity investment, and yur current financial situatin will all be reviewed t determine if a lan can be made. what can the funds be used fr? research and develpment leading t cmmercializatin pre-cmmercial and cmmercial prduct develpment market develpment new prductin and services capacity wrking capital Page 3

4 what are the terms f the lan? lan amunt up t a ttal f $35,000 types f lans term lan: lans repaid ver a specific perid f time by making payments n bth the principal and interest, i.e. mnthly blended payments line f credit (als knwn as an perating lan): nly the interest is required t be paid n the utstanding lan balance each mnth; in mst situatins, the maximum line f credit is $10,000 interest rate prime plus 4% administrative fees are waived under the micrlan prgram fr all term lans and fr the first five years n yur line f credit amrtizatin term lans must be paid ff within five years yur term lan must be renewed after three years; yur mnthly payment may change at that pint yu will be cntacted t renew yur line f credit at the five-year mark equity investment yu must have 10% f the lan amunt invested in yur business in cash r in-kind assets (fr example, a $20,000 lan requires prf f $2,000 f wner s equity invested in the business) in-kind assets are items which will be actively used in yur business and that yu fully wn (fr example, a cmputer r a car - as lng as these items are fully paid fr) ther terms term lans are pen, which means yu can make an additinal payment at any time withut a pre-payment penalty yu are eligible fr tw payment pstpnements n yur term lan per brrwing year: * yu must request a pstpnement at least five business days befre the payment date * there is an administrative fee f 10% f the payment r $25, whichever is less a persnal guarantee is required fr all brrwers; this means that yu will be persnally liable fr the utstanding lan amunt shuld yu chse t end yur business peratins Page 4

5 the applicatin prcess step 1 successfully cmplete r be clse t cmpleting the Abriginal BEST prgram step 2 cmplete the Vancity Abriginal BEST micrlan wrkbk. Save a cpy fr yur wn recrds and then the wrkbk t micrfinance@vancity.cm. If applying fr less than $5,000, please nte that n frmal business plan is required. If applying fr greater than $5,000, a frmal business plan is required. step 3 a Vancity staff member will cntact yu t discuss yur fficial applicatin; if yu have questins cntact the micrfinance prgram manager at step 4 the micrfinance prgram manager will advise yu n the status f yur applicatin step 5 if apprved meet with a Vancity staff member t sign dcumentatin and prvide additinal dcumentatin (if required); funds will be depsited in yur accunt r paid directly t vendrs step 5 if declined speak with ur micrfinance prgram manager abut pssible next steps Page 5

6 n t the lan Think yu want t g ahead? Then it s time t cmplete the Vancity micrlan wrkbk. This wrkbk cnsists f a series f questins abut yu and yur business r business idea. The answers yu prvide will be used by ur analysts t help us understand yur visin and assess yur business readiness. Respnses may either be nted in this wrkbk, r in yur attached business plan. If yu refer us t a sectin f yur business plan, please help us ut by prviding the specific page numbers in the bxes n this frm. Tick the bx next t cmpleted items t track yur prgress. Cmplete Micrlan Wrkbk. Fr lan requests ver $5,000, attach a written business plan including a financial plan (see page 11) A cpy/dcumentatin f cmpletin r current enrllment in the Abriginal BEST prgram Resumes fr each f the wners Relevant supprt dcumentatin, which may include: prf f incrpratin r name registratin lease dcuments survey results cntracts purchase rders letters f intent t purchase qutes r supplier letters If yu have an existing business, please prvide financial statements fr previus perating perids, up t three years. Financial statements include the balance sheet, an incme statement, and a statement f cash flw. Tw current character references, with full cntact infrmatin. Please ensure the references knw that they will be cntacted by Vancity. Page 6

7 Abriginal BEST prgram We ve seen a lt f business plans, and we knw that entrepreneurs wh take the time t gain educatin and third-party evaluatin f their plans cnsistently prduce better results. Because f this experience, we require all entrepreneurs in the micrlan prgram t shw cmmitment t their business by cmpleting a pre-entrepreneurial prgram r wrking with a small business cnsultant t supprt yur business plan develpment. Successful cmpletin f the Abriginal BEST prgram means that yu have taken this imprtant step in getting prepared. Please tell us abut the ther preparatry steps yu ve taken t get this pint with yur business. Tick the bxes when cmplete. Hw and why did yu chse t g int this business? Is this a new r existing business? If this is an existing business, why d yu need ur assistance nw? If yu have had third-party advice in develping yur plan, please let us knw wh yu wrked with and prvide a brief descriptin f hw they have helped yu (fr example, did they help yu gather research, write parts f yur plan with yu r fr yu, r help yu with the financial sectins?) Page 7

8 yur business idea Tday s wrld is mving fast and t catch peple s attentin yu need t be able t describe wh yu are, what yu d and why yur prduct r service is better than yur cmpetitrs. And, yu need t be able t d this in abut 30 secnds. A clear, accurate and cncise statement abut yur business tells us that yu knw yur business inside and ut. Tick the bxes belw when cmplete. In ne hundred wrds r less, what is yur business r business idea? Where is yur business lcated r ging t be lcated? Why have yu chsen this lcatin? Is this n First Natins land (n-reserve)? If s, which cmmunity? Page 8

9 yur experience As part f ur evaluatin, we want t see that yu and yur team have the skills and experience necessary t be successful in yur business. While mst f this expertise usually cmes frm the wners, smetimes utsurcing key activities like bkkeeping are viable ptins. Please discuss the relevant skills yu persnally bring t the business and hw yu intend t fill any gaps in yur experience. Tick the bxes belw when cmplete. Hw have yu demnstrated the apprpriate management and industry experience relevant t yur business? Hw have yu addressed gaps? Hw have yu demnstrated the apprpriate educatinal experience relevant t yur business? Hw have yu addressed any gaps? Page 9

10 yur micrlan request Cash flw is the life-bld f yur business. As a business wner, yu shuld knw exactly hw much mney yu need and where yu can get it frm bth ver-funding and under-funding can be detrimental t business success. It s als imprtant that the type f debt term lans r lines f credit accurately reflects yur needs. Please prvide the fllwing infrmatin r dcumentatin. Tick the bxes when cmplete. Hw much mney d yu need? Hw much in a term lan and hw much in a line f credit? Will yu be receiving mney frm ther surces? If s, frm where? What is the mney ging t be used fr? See page 3 f this wrkbk t see what the funds can be used fr. Please be specific. Did yu cmplete a tw-year prjected cash flw statement? Des the tw-year prjected cash flw in yur business plan reflect receiving a micrlan frm Vancity? In additin t the expenses f the business, des the tw-year prjected cash flw in yur business plan reflect the cash required t cver mnthly lan payments? Hw much cash are yu putting int yur business? What additinal in-kind assets have yu put int yur business? Please be specific when yu describe the type f in-kind asset and prvide a realistic estimate f current market value. Page 10

11 cnfirmatin f custmer demand (supprt fr yur prjectins) Financial prjectins can be intimidating, but they directly reflect the knwledge yu ve gained abut yur target market and industry thrughut the business planning prcess. We knw that financial prjectins are, at best, an educated guess. What we re lking fr is that they reasnably and accurately reflect yur marketing plan. Please prvide the fllwing infrmatin r dcumentatin. Tick the bx when cmplete. What are yur anticipated sales in the first mnth? Hw did yu reach that number? Hw will yur sales change ver time? Attach cpies f any research that yu ve used t develp these prjectins and prvide yur analysis f that research. yur back-up plan Please prvide the fllwing infrmatin, r prvide the fllwing dcumentatin. Tick the bxes when cmplete. D yu r will yu receive self-emplyment (SE) benefits? Up t what date will yu cntinue t receive SE benefits? If yur financial prjectins are nt met, hw will the lan payments be made? What will yu d if yur business des nt succeed? Page 11

12 yur business plan Failing t plan is planning t fail. Writing a business plan is nt an end in itself, but is an intermediary step t launching a successful business. Nt nly will it dcument all the need t knws up frnt, such as yur target market and the regulatry requirements f yur business, but it will detail yur executin plan and prvide a step-by-step t-d list prir t pening the drs f yur business. It s a dcument that yu will reflect back n t ensure yu are n track and meeting yur milestnes. Fr lan requests under $5,000, it is nt necessary t attach a frmal business plan t this Vancity Abriginal BEST micrlan wrkbk. Fr lan requests ver $5,000 we will need mre infrmatin, and ask that yu attach a cpy f yur business plan. Tick the bx when cmplete. Cmplete a written business plan which includes these elements: - an executive summary - detailed market research that speaks t bth yur prduct r service and its ptential in yur specific market. Surveys and fcus grup research are ideal. Our analysts are unable t read yur cmpetitrs websites, s please prvide sme narrative analysis f the strengths and weaknesses f yur cmpetitin. - an peratins plan that explains the day-t-day life f yur business. What kind f staffing and systems need t be in place? D yu have these? What steps will it t take t get yur drs pen n day ne? What activities need t happen n an annual basis (such as license r membership renewals)? - the financial plan is ne f the mst imprtant parts f yur applicatin. But please nte, yur financial plan is nt just numbers. Our analysts need t knw hw yu arrived at key numbers - s please explain yur assumptins. At the very least we need t knw: Are yur expenses based n yur past experience in that industry r n interviews with wners f similar businesses? Hw did yu arrive at yur price pint? - in additin t yur narrative, please include the fllwing in yur financial plan: 24 mnths f prjected cash flw incme statement Page 12

13 balance sheet break-even analysis (fr new businesses nly) prf f equity investment (fr new businesses nly) credit histry/repayment histry Yur credit histry (als knwn as yur credit bureau, credit reprt and credit recrd) prvides us with yur brrwing and credit prfile, based n yur past repayment f ther debt. It s imprtant t treat yur credit recrd with care, as it will greatly impact all f yur banking activities in life. If yu have n credit recrd because yu are new t Canada, r yu ve just never had credit, there are ther ways t prve yur repayment histry, such as a letter frm yur landlrd. Please describe yur credit situatin. Tick the bxes when cmplete. What items are n yur credit reprt (such as utstanding credit cards ther lans)? * Are there any issues with yur credit reprt, such as verdue lans, tickets, phne bills r department stre credit cards? Please explain any negative items and what yu have dne t address them. * If yu dn t knw what s n yur credit reprt, call Equifax: r TransUnin: t request a free cpy. Or visit t rder a free cpy by mail. This is smething yu shuld d nce a year t ensure yur credit reprt is accurate and up-t-date. Page 13

14 character references Please attach tw letters f reference and prvide the fllwing infrmatin. Tick the bxes when cmplete. The references are nt friends r family. The references are relevant t my prfessinal experience and/r business. If the references are related parties (fr example, they wrk with yu nw), please indicate hw they are related and what their interest is in yur business. The references are aware they will be cntacted by Vancity s micrfinance team. Reference #1: Name: Best time t call: Phne: Relatinship t Brrwer: Reference #2: Name: Best time t call: Phne: Relatinship t Brrwer: Next sectin is the business lan applicatin frm. Yu, any ther partners, cmpany sharehlders, and any lan guarantrs must sign this frm. Please answer truthfully and as cmpletely as pssible. Page 14

15 business lan applicatin Applicatin number 1. Business details Applicant s Business Name Year business established Date f incrpratin (if different) Type f industry Business web address Business address Business address Business telephne Name f accredited accuntant Accuntant s address Accuntant s telephne Primary financial institutin Branch address Accunt number 2. Lan request details Amunt requested Intended purpse f lan 3. Owners/sharehlders f the business (Nte: wners may be required t prvide a persnal guarantr fr lan) Name Hme address Title % f wnership Birth date 4. Directrs f the business Effective June 23, 2008, accrding t Prceeds f Crime (Mney Laundering) and Terrrist Financing Act and its Regulatins, Vancity must meet certain recrd keeping requirements. Please prvide the name and ccupatin f all directrs f the crpratin nt nted abve. Name Occupatin Name Occupatin Applicable t Exprters: Are yu a direct exprter f gds and/r services in the nrmal curse f yur business and des yur business plan call fr yu t cntinue t exprt in the nrmal curse f ur business? Yes N Third Party Declaratin. A third party is an individual, cmpany, r ther entity that is nt the named accunt hlder(s). Emplyees wh prcess business transactins n behalf f their emplyer are nt cnsidered third parties. Is this lan intended fr use by a third party? Yes N Nte: If yes, please cmplete Third Party Declaratin Frm Financial Statements: There have been n material adverse changes in the financial cnditin f the applicant since date f the last fiscal year f the Applicant fr which a balance sheet and incme statement have been prvided.) (Insert year end Declaratins: The applicant and if applicable, the guarantr(s), must read each statement. Page 15

16 The Applicant and any Guarantrs declare that Nne have been declared bankrupt (discharged r undischarged) and have nt been the subject f ther inslvency prceedings r prpsals. Nne are cllectively r individually invlved in illegal activities and affirm that n legal actin, suit, r claim is either underway r imminent. All cmmitments are up-t-date and as agreed (including payments t gvernment GST, PST, etc.). All the permits and licenses required by law fr the activities f the business are held and in rder. I/We hereby certify the prvided infrmatin is true, crrect, and cmplete. I/We acknwledge t have received a cpy f the Privacy Statement and agree t be bund thereby; I/we authrize Vancity t make any enquiries and t btain any infrmatin frm such persns, firms, crpratins, gvernment authrities, institutins r agencies as it deems necessary in rder t reach a decisin n any lan) and cnsent t the disclsures at any time f infrmatin t ther financial institutins. Applicant(s): Name (please print) signature date Name (please print) signature date Name (please print) signature date Guarantr(s): Name (please print) signature date Name (please print) signature date persnal infrmatin Nt nly d we lend t a business, we lend t a persn and that persn is yu. We want t understand yu, and yur persnal financial histry. The next sectin is a tw-page Vancity persnal financial statement. This frm prvides us with infrmatin abut yur persnal financial situatin. It includes yur persnal net wrth, which is the sum f yur persnal assets and yur persnal liabilities. The frm must be cmpleted by: 1. each prprietr 2. each limited partner wning 25% r mre f the business 3. each general partner 4. each sharehlder wning 25% r mre f vting shares 5. any persn r entity prviding a guarantee n the lan Please click n the icn belw fr extra cpies f the persnal financial statement. Page 16

17 Persnal Financial Statement.pdf persnal financial statement This frm must be cmpleted by each prprietr, each limited partner wning 25% r mre f the business, each general partner, each sharehlder wning 25% r mre f vting shares, and any persn r entity prviding a guarantee t lan. 1. Yur persnal infrmatin Name (last, first, middle initial) Date f birth Scial insurance number Current address City, prvince Pstal cde Hme phne Business phne r cell Time at current address (years, mnths) Residence status Previus address (if current less than 3 years) City, prvince wner renter ther Current emplyer Current psitin/ title Length f emplyment (years, mnths) Previus emplyer (if current less than 2 years) Previus psitin/ title Length f emplyment (years, mnths) Abriginal Ancestry Certificate f Indian Status/ Métis Card Number Affiliatin Yes N Marital status Number f dependents Spuse s name (if applicable) single married separated/divrced Spuse s current emplyer Spuse s length f time with emplyer (years, mnths) Spuse s business phne Spuse s scial insurance number Primary financial institutin Branch Accunt number 2. Yur persnal net wrth statement Assets Asset type Details (e.g. Bank/credit unin) Primary chequing/ savings accunt Current value (mit cents) Liability type Primary credit card: Liabilities Current utstanding (mit cents) Other chequing/ savings accunts Other credit card(s): Term depsits/ GIC s Stcks/ bnds/ mutual funds RRSP s (savings, terms, stcks, bnds) RRSP lan(s) Autmbile (year/ make) Aut lan(s) / lease(s) Page 17

18 Other assets (prvide brief descriptin): Other assets (prvide brief descriptin): Canadian real estate (refer t sectin 4) Ttal assets Line(s) f credit Balance wing Authrized limit Persnal lan(s) and ther liabilities Mrtgage(s) n Canadian real estate (refer t sectin 4) Ttal liabilities 3. Yur current mnthly incme and expenses Incme Expenses Yur incme Grss mnthly amunt ($) Yur mnthly expenses Mnthly payment amunt ($) Salary r wages Mrtgage/ rent payments Other incme please itemize (e.g. dividends, interest, cmmissins, alimny, child supprt) Strata & maintenance fees Prperty taxes Heat/ hydr Yur spuse s incme (if applicable) Mnthly salary r wages Other incme please itemize (e.g. dividends, interest, cmmissins, alimny, child supprt) Persnal lans mnthly payments Other debts mnthly payments (e.g. CRA payment plan fr prir years) Other expenses please itemize (e.g. alimny, child supprt) 4. Yur details fr wned Canadian real estate (If attachments prvided with infrmatin, please nte cnnectin t this statement & sign.) Prperty A Prperty B Prperty C Prperty type (e.g. residential, cmmercial, raw land) Address Registered wner(s) Percent wnership Mrtgage hlder (bank) & accunt n. Present market value Mrtgage balance utstanding Page 18

19 Mrtgage payment per mnth Mnthly rental incme 5. Yur persnal declaratins Have yu ever experienced a repssessin? Have yu ever declared bankruptcy? Are yu a party t any claims r suits? D yu we any incme tax fr years prir t the current year? Yes N Yes N If yes, when? Yes N Yes N If yes, nte utstanding amunt $ Signature(s) I/We hereby certify the infrmatin I/we have prvided is true, crrect and cmplete; I/We acknwledge t have received a cpy f the Privacy Statement and agree t be bund thereby; I/we authrize Vancity t btain an infrmatin reprt n me/us (r ur spuse) frm a cnsumer reprting agency, r t give infrmatin abut me/us t, r receive such infrmatin frm, any credit reprting agency r ther financial institutin. Name Signature Date Name Signature Date Page 19