When business owners applied for a small business loan in the past, you’d need to haul paperwork into your local bank and hope for the best. These days there are plenty of options – some require little information and others with better rates and terms require a fair amount of paperwork. Here’s a summary of what you’ll need to successfully complete a loan application. Every lender varies but these are the top documents usually requested.
Your first step will be choosing the application method, either directly through a bank or a credit union, from a certified loan broker or via an online platform. You’ll save lots of time and headaches by working with an online marketplace with a streamlines process like SmartBiz Loans. Borrowers simply upload requested documents to a secure platform. If questions arise, a dedicated loan specialist is on hand to help.
Do you meet requirements for the loan you need to reach your financing goals? Most lenders have an initial screening process reviewing time in business, credit scores, cash flow and more.
If you’re seeking the gold standard in small business loans, consider an SBA loan with low rates, long terms and very low monthly payments. To determine if you’re qualified, you can easily create an account for the new SmartBiz Advisor™ tool. The SmartBiz online platform uses advanced algorithms to determine your unique “Loan Ready Score”. Simply create an account and to determine if you meet key financial ratios that SBA banks consider. Learn more here or get started here.
Check Your Credit
Both your personal credit score and your business credit score are usually considered when you apply for a business loan. Lenders want to know your track record of paying obligations and if you pay those obligations in full and on time. Our blog has a wealth of information on how to find your scores for free and what the numbers mean. Check out the following articles for more information.
- Personal Credit Scores: Important When Seeking a Loan This article includes a quiz to test your knowledge along with in-depth answers.
- Do You Know Your SBSS FICO Business Credit Score? Learn about this important metric considered by lenders and how you can improve your score.
Put Together Paperwork
The more paperwork you produce that shows positive growth, the better. If you’re looking for low-cost funds, faster can be much more expensive. Here are documents you should have on hand to prepare for the process.
- Completed Application Loan Form
- Resume with Relevant Professional Experience
- Credit Reports
- Personal & Business Tax Returns
- Personal Financial Statements
- Profit and Loss Statement
- Balance Sheet
Other documents, such as business licenses, Articles of Incorporation, commercial leases, or franchise agreements, may be requested depending on the particular loan application. Our blog has an in-depth article with additional information about each document requirement here. Working with your tax preparer or an accountant can make the gathering process easier.
A good strategy is to work with your accountant or tax preparer to help gather and file the relevant information.
Denied? What’s Next?
If you’ve completed the process and been denied, you have options. Review this post from the SmartBiz Small Business Blog to determine next steps. You’ll learn how to improve your financial profile if necessary.