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Engineering Loans

Upon completion of your “Cash Flow Analysis” for your Business Plan, consulting engineers have a pretty good guess as to your first year’s funding needs. To be conservative seek 20-30 % more in business loans

There are two types of funding: Equity & Debt.


This is what you and your partners have saved and are willing to invest in the business. Lenders will expect at least 30 % of your first year funding needs to be “equity” funded.


This is borrowed money that must be paid back; engineering loans. Normally the principal and interest is paid back in fixed monthly payments. Be sure that you have estimated these payments in your “Cash Flow Analysis”.




A bank is a financial institution that accepts deposits and channels those deposits into lending activities.

Credit Unions:

A Credit Union is a member-owned financial cooperative operated for the purpose of promoting thrift and providing credit to its members at competitive rates.

In opening your account at any financial institution, be aware that a local branch manager has less “approval authority”, without the need for committee approval, than does a senior manager at the main office.



The Small Business Administration (SBA) program is designed for business owners who may have trouble qualifying for traditional bank loans. The SBA does not give loans; it guarantees a portion of loans. Loans come from banks and other approved lenders who make the final decisions. Also, the SBA does not offer grants to start or grow a business.



If you have saved all that you need to start your Consulting Engineering Practice, I congratulate you as one of the few. If you inherited wealth or won the lottery, I envy you. But, if you are like most of us you are going to need funding. The financial institution that you go to is required to do what is called “due diligence” and will require the following:

A neatly bound copy of your “Business Plan”.

“Your Net-Worth Statement” which lists you’re assets & Liabilities. It is important that it is not negative and that you have some liquid assets, like savings and investments (in addition to 401Ks & IRAs), and don’t have credit card debt that is not paid off monthly. Each partner will have to provide this information.

Know your “credit rating” and be prepared to discuss it.

In addition, expect that a “Credit Check” will be done regarding each of you.

Also, in most cases a “Background Check” will be done.

It is also common, nowadays, to do a “Social Media Check”.

It is important that you prepare for the meeting with the Loan Officer. This is one of the most important meetings of your life, but if you are prepared, you will make a great impression. Not only will the bank be evaluating your business plan, but it will be judging your presentation, as it relates to your ability to win clients and projects.

Dress professionally. Try to appear self-confident, enthusiastic, and well informed.

Prepare a 20 minute presentation of your business plan. Assume that the loan officer does not know what type of engineering that your firm does or even what a consulting engineer ensures. Sound professional, but remember that you are talking to a “layperson”. Don’t talk down to them.

Stress your ability to service the debt; your level of commitment; and your integrity, as demonstrated by your credit history.

Thank the Loan Officer for his time and consideration. A “thank you” note or e-mail is always a good idea.



If your loan is turned down, try to find out why. This may give you the opportunity to correct the problem and reapply. Also, it would be helpful to know what to correct before applying elsewhere. Reasons for rejection include: insufficient collateral; lack of financial commitment on your part; a poor business plan; your character, stability or personality. On the other hand, the problem may be internal to the bank; perhaps they have exceeded their quota of commercial loans for the time period.

“Excerpted from The “Complete Guide” to CONSULTING ENGINEERING © 2015 John D. Gaskell. Used with permission of Professional Value Books, Inc. All rights reserved. Order from” Use discount code “paperback” and save.