There are several types of markets and I will shortly state and describe them.
The first digit is direct search markets, and it is the least organized of markets. Buyers and sellers simply seek each another out directly, as if you are shopping around in an auction. A good example of this, is the sale of a used table where the buyer and seller found each another online.

The next field is brokered market, where you have someone who takes the task of finding the right person who is going to acquire securities from you or sell you theirs. A good example of this is the actual realty market, where you really can’t acquire a concern without a professional actual realty broker to take tending of all the tasks and find proper homes.

Markets in which traders specializing in particular assets (stocks, bonds, boats, cars, etc…) acquire and sell for their own accounts are called the dealer markets. A quick example of this is the over-the-counter (OTC) market. Dealer markets spend traders on search fees because people participating in the mart can easily look up the price range that they want to purchase or sell in the market.

The most integrated area is an auction market, where all traders get together at digit locate to acquire and/or sell an asset. The New York Stock Exchange (NYSE) is a great example of this auction market. An advantage if this, over other markets, is that no digit has to search across dealers to find the best prices. If all participants are in digit area then the general consensus can find a mutually agreeable price and spend the bid-ask spread.

Most small business owners/CEO’s work with their bookkeeper or Controller to compile information they think the Lender would want to see. They then schedule an appointment with their Bank Officer to request a loan. Professionals services firms lead you through a 3 step process: 1) prepare a Bank Loan Proposal Package that “tells the story” to the Banker describing your businesses; 2) presents the financial information the lender requires; 3) presents your business in the best light – an organization that is professional, has done its homework, and can stand behind their numbers. Typically, businesses that present a comprehensive Bank Loan Proposal Package move up in the review priority sequence, as lender’s have less work to do gathering information. The result is that the loan application is promptly sent to loan committee for review and approval faster.

The typical elements of a professionally prepared Bank Proposal Package are:

- Executive Summary
- Business Plan
- Personal Financial Statement
- Recent Credit Report with FICO Score
- Management and Ownership Profile
- Financial projections for the current year
- Most recent 3 years tax returns
- List of all assets including appraisals, copy of purchase orders, acquisition price and current net book value. The lenders typically like to see an estimate of orderly liquidation value (“OLV”) and forced liquidation value of the assets (“FLV”)
- Current aging report for accounts receivable and accounts payable
- Organizational Documents
- Information related to other loans, leases, etc.
- Website – URL link and high resolution color copy of the Home Page and About Us page
- Source and Use of Funds Statement for the proposed loan
- Application from the lender

Conclusion:

If your business is seeking debt or lease financing, I recommend you prepare a professional Bank Proposal Package to give your business an advantage over the competition. Additionally, leveraging a Professional Services firm that offers part time CFO assistance to develop the Bank Proposal Package and will accompany you to your meetings with the lenders, give you an unparalleled advantage to secure funding.