07/21/14

6 Things You’ll Need to Include in Your Loan Package

Not all small business loans (or lenders) are created equal and what each loan officer wants to see might be a little bit different, but if you take time to collect this information and have it ready before you start looking for a loan, it will make the process move much more quickly and might even help improve the odds you’ll receive a loan offer. A lender once told me, “If I know more about the borrower by looking at their financials than they do, it’s not likely I’ll give them a loan.”

Collecting the data before your first conversation with a lender is a great way to make sure you understand why he or she should offer you a loan. Here are six things you should make certain you have ready before you talk to a lender:

  1. Personal Background and Financial Statement: When looking for a small business loan, most lenders will want to see your personal information as well as your business information. This is especially true if your business is less than a couple of years old. You’ll also likely be asked to sign a personal guarantee if you are offered a loan.
  2. Business Financial Statements: Your business financial statement should demonstrate your ability to repay the loan and should include a Profit & Loss (P&L) Statement. This should be current within 90 days of your application and will need to include any supplementary schedules from the last three fiscal years. It should also include Projected Financial Statements—a one year detailed projection of income and expenses along with a written plan of how you plan to achieve these objectives. Whether or not the lender asks for these specific documents, collecting them will give you an opportunity to dive into your business financials so you can feel confident you know where your business is right now and where it is headed over the next year.
  3. Ownership and Affiliations: You should be prepared to disclose any other businesses you have a financial interest in. This is particularly true if you’re applying for an SBA loan.
  4. Business Certificate/Business License: You’ll want to have your business license handy and if you’re business is a corporation, your corporate seal.
  5. Income Tax Returns: Include a signed personal and business federal tax returns fro the previous three years (for all principles in the business).
  6. Business Lease: Include a copy of your lease agreement if you are renting space or leasing any equipment critical to doing business.

Although some of these documents won’t be required by all lenders, taking the time to put together a loan package is still a good idea. It allows you to spend time outside of the day-to-day grind to make sure you understand some of the key financial indicators a lender is going to ask about. There is no shortcut to diving into the numbers and reports; and doing so just might improve the odds of a successful loan application.

Get more small business tips from Lendio.

About the author

Ty Kiisel
Small business evangelist and veteran of over 30 years in the trenches of Main Street business, Ty makes small business financing and trends accessible in common sense language devoid of the jargon.

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