Small Business Loans
When starting a small business, access to capital is necessary to get things off the ground. While there are many places you can go to request a small business loan, it does not mean that they are easy to secure. When applying for a loan, the more prepared you are the better. An entrepreneur who is organized and has all the necessary and desired information on hand will have a better chance at securing the loan! Below is a list of the documents you should have when applying for a small business loan.
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You Should Have These Documents Prepared
- Business Plan – Your business plan is important for lenders. It is what informs them about the business itself and the purpose of the loan. Without a well thought out business plan, lenders may feel like they don’t have enough information to make an informed decision.
- Resume – Lenders may want to know about your personal story, school history, and occupational history to gain a better understanding of who you are. This information may provide important insight into your business and work ethic.
- Personal Credit Report – Lenders will run their own credit check. Before they do that, you should review your own credit report to ensure that all of the entries are accurate. If there are any inaccuracies, immediately begin the process to correct it.
- Business Credit Report – For similar reasons, a lender will likely want to have credit information on your business if you have one. If you are already running your business bring the last three years of tax returns and a current profit and loss statement. If you do not have a current profit and loss statement, invest the time with an accountant to have one. A lender will not take you seriously unless you are getting professional tax advice.
- Tax Returns – Lenders will typically want to see your prior three tax returns to see how stable your business and personal financials are.
- Bank Statements – Providing your bank statements also helps the lender gain a better understanding of the broader financial dimensions that relate to the specifics of your loan request. If there are any large withdrawals or transfers in your recent banking history, the lender will want to know about it.
- Collateral Documentation – Most lenders will require proof of collateral to ensure that the loan can be secured. Collateral can exist in assets such as real estate, equipment, inventory, or cash savings.
- Business Legal Documents – All legal documents pertaining to your business, e.g. business licenses, franchise agreements, state business registration, etc. will need to be provided to ensure to the lender that the business you’re running, or seeking to establish, is properly (legally) registered.
- Commercial Leases – You’ll need to disclose other financial obligations you may have, such as another lender or a lease.