The Small Business Loan Checklist You Need
Starting a business is an adventure, but it can be difficult to know where to start. For those who need a small business loan, there are a few things to know before beginning the process. When it’s time to search for a program, most lenders will want the same information, though the applications may vary. There are a few items to keep on hand in order to make the loan process go more smoothly.
A good business plan is a must when applying for a loan. Search the internet for tips on writing a solid business plan. Be sure to include financial statements such as the projected cash flow, profit, loss and more. You could also include a credit report, even though the lender will likely obtain a report separately.
Although you have already included financial statements with your business plan, it is beneficial to have bank statements, cash flow, a balance sheet, and income statements available. Your loan program may require you to submit bank statements for yourself or your business for the previous year. You may also be required to provide details regarding your present financial state, so it is important to have an accounts receivable and accounts payable.
Most loan programs will require you to submit your personal and business income tax returns for the last three years.
Some small business loan programs require collateral, while others do not. If you would like to try to avoid putting up collateral, your financial statements and a strong business plan can help. However, you should still prepare a document describing collateral that could be used to obtain a loan, including information on the cost or value of the property.
Before you go to obtain a business loan, you may need to have legal documents in order. Obtain commercial leases, necessary business licenses and registrations, contracts with third parties, articles of incorporation and anything else required for you to run your business. Be sure the information you provide is correct as this could affect your loan application.
Although application forms for small business loans will differ, most programs will likely want the same information. Prepare information about how the loan will be used, why you are applying for a loan, what you will be purchasing with the loan, who your management team is, who your suppliers and creditors are and your personal background. Before applying for a loan, be sure to have information about your personal background such as names used, previous addresses, educational background, criminal record and more.
Keep all of your information and documents organized to help make securing your small business loan easier and smoother.