Business plans need to reflect a feasible business idea. Your skills and knowledge play an important role in the success or failure of the business you propose. A feasible business plan will address each of the following five feasibility considerations.

Cash Flow - Ability to repay the loan is determined by cash flow projections. Your business must be profitable sometime in the first year or early in the second year when considering startup costs and matching month-by-month expenses to month-by-month revenues.

Character - Experience you bring to the table, such as small business management and education. The fact that you can produce something people in the market want to buy does not guarantee the success of your business. You also have to manage marketing, hiring employees, record keeping, problem solving, and planning.

Credit - Your credit background is important. If you feel you have credit problems, obtain a copy of your credit report in advance, and be prepared to explain any problems or discrepancies. Your credit will be checked, and your score will be a major factor.

Capital - You must put cash in your business if you expect someone else to provide funds. There are no 100% financing programs. Be prepared to provide at least 25-30% of all startup costs in cash and/or equipment.

Collateral - Lenders want security for the funds they lend with a pledge of business assets (vehicles, equipment, etc.) and if necessary, personal assets. Home equity is not acceptable collateral for business loans. Home equity funds obtained through separate financing may be subsequently used for business financing.