Small Business Financing: A Comprehensive Checklist

4 min read • Jan 16, 2015 • Guest Post

If you’re looking to secure small business financing, you want to make sure there are a few essential items that are in order and healthy. Start by asking yourself 7 essential questions, and then follow-up with this 8-point checklist.

7 Questions to Prep for Small Business Financing

  1. Why do you need financing?
  2. What will the capital be used for?
  3. When do you need financing?
  4. How much will you need?
  5. What is your repayment plan?
  6. How healthy is your personal/business financial status?
  7. What are the qualifications/capabilities of your management team?


First, ask yourself if you need financing at all. Could you manage with existing cash flow, or do you really need the extra boost for the expansion you’d like to invest in? It’s better to get a loan before you need it, so think about whether or not you’ll need it in the near future.

If you decide that your current cash flow will not be enough, identify why you need more capital. Are you expanding? Is it for your startup?


Lenders will want to know specifics. Are you investing in new equipment? Hiring more employees? Expanding or upgrading your office space? Don’t leave anything out. Specify what it will be used for with corresponding dollar amounts.

You’ll also want to articulate why you need these improvements? How will these investments grow your business? 


If you need a loan tomorrow, you’re probably already too late. Don’t wait for a crisis to apply for  small business financing of any kind. Look ahead and plan for growth and protection from crises.


This is where you’ll really need to get into the details. If you’re looking for startup loans, it’s difficult to know if your financial forecasting is accurate. Many entrepreneurial experts say it costs twice as much as you expected when it comes to startups.

If you’ve been in business for a few years or more, you should have a financial record that will give you a better idea of what you can expect to borrow.


There should be two parts to your answer:

  1. What is your preferred repayment plan (which will then be negotiated)?
  2. What if Repayment Plan A falls through? What if your sales are worse than projected? What’s Plan B?

Lenders want to see a realistic vision of how the invested capital will expand and grow your bottom line so that, ultimately, they receive repayment.


Your personal credit is just as important as your small businesses’s credit–especially if you’re a startup. If your business is young, lenders will want to see your personal credit as well. And, depending on the lender and the type/amount of loan your looking for, lenders will likely want to see your personal credit even if you’ve been in business for years.


It takes more than money to grow a successful business. If your team is under-qualified or experiencing any kind of disfunction, you’ll want to take this into consideration when you think about the risks of taking on debt. Make sure you’re team is qualified and has the resume to impress lenders.

7 common documents lenders want to see:

  1. Personal & business credit reports
  2. Income tax returns from previous 3 years
  3. Financial Statements & Projected Financial Statements (Balance Sheet: assets, liabilities and net worth)
  4. Personal & Business Bank Statements
  5. Business license and registration
  6. Articles of Incorporation
  7. Business Plan (Executive Summary, Market Analysis, Company Profile, Organization Description, etc).

Personal & Business Credit Reports

Lenders want to get an overall picture of your credit health. If you were a lender, would you want to hand out money to someone or some business with a low credit report? Your personal credit says just as much about your financial capabilities as does your business credit report.

Income Tax Returns from Previous 3 Years

The more profitable your small business looks on tax returns, the more likely it is that you’ll get small business financing. This means that you might want to avoid taking all those deductions for a few years. Oftentimes there’s a tradeoff: write-off deductions and save money during tax season, or pay a hefty tax in order to portray a more profitable company.

Financial Statements & Projected Financial Statements

Make sure your financial statements are 100 percent accurate. Don’t try to fudge anything here. Lenders will do a number crunch, and if you’ve manipulated anything in any way, their ratios will reveal your dishonesty. Tell it straight.

Do your due diligence with the projected financial statements as well. Take the time here to impress lenders with a well thought out and meticulous plan.

Personal & Business Bank Statements

Most lenders want to see both personal and business bank statements. You’ll want to be ready to explain any drastic periods where you were low on cash or even went negative.

Business License & Registration

Luckily, most of this is online if you haven’t kept a physical copy handy.

Articles of Incorporation

These are those legal documents you may have not looked over in a while. It’s a good time for you to review the articles of incorporation if you’re looking for financing.

Business Plan

Make sure you write and edit your business plan. Find other experts and professionals to read through it and find holes before lenders find them. You want to make sure you’ve covered everything that lenders could possibly ask.

Once you’ve finished these up, you’re ready to start looking for a loan.

To see all of your small business loan options in one place, click here to use Lendio.


Ann Whittaker

Content Manager for Ignite Spot Outsourced Accounting. Ann writes about accounting, finance and entrepreneurship. She spends her weekends backcountry skiing and annotating poetry.