Financial forecasting 101 how to plan for a business loan

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FINANCIAL FORECASTING 101 HOW TO PLAN FOR A
BUSINESS LOAN
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Financial forecasting is a must step in running a
small business. Despite an impeccable business
plan, a business might need external help from a
business loan to manage the cash flow
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What is a financial forecast?
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What is financial forecast?

• Financial forecasting comprises of numerous
  financial statements often labeled as pro forma
  statements. Lenders, banks and angel investors
  consider this essential financial information
  when they are working on a business loan deal
  with you.
• An ideal financial plan consists of
• An income statement
• A CFS (cash flow statement)
• A pro forma balance sheet
• Income statement This mentions the amount of
  money that comes in and goes out of your
  business.
• CFS This uses the data from the income statement
  to predict profit and loss.
• Pro Forma Balance Sheet This uses the data from
  income statement and CFS to forecast assets,
  liabilities, and equity.

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Why Financial Forecasting is important?
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It is important to formulate a business plan to
stay ahead of the financial surprises.
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What does your income statement depict?
The primary purpose of the income statement is to
compare your assets to the expenses.

• Expenses

• Project and introspect your sales

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What does Cash Flow Statement depict?
As a business manager, you must know the
difference between cash flow and profit. A CFS
can help you figure out the total amount of money
you need from the lender. External funding is a
remarkable and beneficial way to take your
business on the path of success.
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• How to create a pro forma balance sheet and what
  does it depict?
• Use the balance sheet to foretell the financial
  changes in the business by comparing the
  companys asset, equities, and liabilities.
• Assets
• Liabilities
• Tip The key is to make a rational and realistic
  plan for the future.

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Cheat sheet for financial forecasting

• Create a column for each month of the year.
• Add another row and list and add your current
  cash position in that row.
• Make a row titled sources of cash and add the
  relevant data.
• Next, create another row titled complete list of
  sources of cash and add the number you are
  starting with.
• Another row that is dedicated to the uses of the
  cash.
• Another section would be signifying the bottom
  line.
• Finally, take that number from the bottom line
  section and move it to the top row of the next
  month.

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Once you have completed the financial
forecasting, you are multiple steps closer to
leveraging the financial planning and forecasting
for the growth of your small business.
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Have a look at all the small business loans
offered by the Merchant Advisors, and Apply Today
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GET IN TOUCH
E-mail
info_at_merchantadvisors.com
Address
9-5 Novelty Lane Suite B Essex, Ct 06426
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