What Information Do I Need to Provide to Get a Small Business Loan?
The Small Business Administration (SBA) is the first source of small business financing most budding entrepreneurs consider when seeking the funds to get up and running. However, economic development groups at the state and community level, including non-profit entities, offer low-interest loans to small business founders as well. No matter the funding source, entrepreneurs must have certain documents at hand when applying for a business loan.
Other People Are Reading
-
Personal Information
-
The majority of lenders will request personal information when you apply for funding. The lender will be interested in your residential addresses over the last five years, as well as any name changes you have undergone due to marriage, divorce or other reasons, along with your educational history to get an idea of your recent background. If you have a criminal record, your lender will need to know this upfront to prevent any problems in the loan process later. You should also have an updated resume available that lists all of your previous business and management experience.
Financial Information
-
Having your financial paperwork in order will demonstrate favorable organizational skills to your lender. Prior to applying for a small business loan, review your credit reports from the big three credit agencies -- Experian, TransUnion and Equifax. You are entitled to a free report from each agency annually. If you identify inaccuracies on a report, you can contact the agency directly and ask to have them removed. Most lenders will order their own copies of your credit history, so you will benefit from clearing up any inaccuracies in advance. You should also have copies of personal and any business income tax returns for the past three years and a year's worth of bank statements.
-
Business Plan
-
Write a detailed, clear business plan before meeting with a lender. Include your projected financial statements, with profit and loss, a balance sheet and cash flow projections. Detail the cost of doing business, including rent, advertising, inventory and marketing. The plan should describe staff and salary considerations, plus what you expect to earn.
Loan Application
-
The lending institution will require you to submit a completed loan application. While the format of the application varies from lender to lender, be prepared to answer certain questions common to most, such as: "Why are you applying for a loan?" and "How will you use the funding?" The application will ask what assets you will be purchasing and from whom, as well as whether you have already incurred business debts and to whom.
Licensing
-
Check in advance to see what business documents your lender requires. A municipal business license and registration with your state's Department of Revenue are standard forms to consider. Articles of incorporation or approval of non-profit status are additional examples of documents your lender may require.
-
