How to Write an Application for Business Finance
Access to financing is important for businesses. The funds help cover operating expenses, capital improvements, expansion and more. Approval for business financing in the form of a loan or credit card is determined by information on your application along with a credit check. Often banks ask for additional information beyond the application. Banks may seek information about the financial stability of the owners, along with a review of how the company has been performing during the past three years, if it has been in business that long.
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Instructions
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Obtain audited profit and loss statements for your business dating back at least two years and preferably three, if possible. Ask your accountant to provide the records. The report should detail the financial operation of your business, including sales and expenses, assets, debts and liabilities.
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Write an executive summary to introduce the profit-and-loss statements. The executive summary should be an updated, mini version of your business plan. It should be one or two pages long and discuss the current state of the business, its performance over the past two to three years and its immediate outlook. It should also discuss how the new business financing will be used to improve the company or its operations.
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Gather updated resumes and personal financial statements for the principal owners along with copies of their federal tax returns for the past two years. It is common for banks to require personal guarantees from business owners. The financial statements should show the net worth of the owners, including assets such as real estate, retirement plans and stocks and bonds.
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Fill out the bank application for financing by answering all questions completely. Submit the application to the bank along with the supporting information and documents.
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