To assess any business’ management risk, we need to know about the skills, commitment and abilities of the owners and management.
- Are you employed full-time in your business? (Small businesses run by their owners are usually more successful)
- If your business is a franchise, do the franchisors give you training? (The success rate of franchises is high)
- Do you have the technical, financial and marketing skills to run your business? Or do you have the support of people who do? (A CV detailing your business experience often helps)
- What’s the net value of your personal assets as a percentage of the amount of the loan you’re applying for?
- What’s the minimum amount of drawings (eg your salary) that you’ll need from your business?
- What’s the total amount of loans that you already have with financial institutions?
- How old are you?
- Do you have a succession plan for your business in the event of your retirement or death?
- Do you have enough personal insurance to cover your debt?
- Is your business insured?