As every loan program has a unique and different types of application forms that a business owner need to fill out and some credentials or paperwork you need to submit along with it, you probably will need to provide almost the same sort of information for different loan programs. Listed below are the typical things that you will need for any business loan application;
Business Loan Application Form
After determining the types of business loan you meet the requirements for, you may be able to discover an online loan application form or from a lender. This loan application form will ask you to provide your personal and business financial information, and will summarize all of the credentials and supporting documents you will need to apply for a particular business loan.
Most of the small business lenders will ask for a legitimate business plan to be submitted along with the business loan application. The marketing strategy or a business plan should comprise of a complete list of estimated financial statements, which includes P&L statements, documented cash flow and more. The major elements of the business plan will be:
- Executive Summary: Summarize your business plan in this section. Executive summary is a short description of your business plan.
- Business Description: Define various parts of your product or service offerings, history, current events, your personal objectives and things that lead you business to success.
- Products And Services: Describe about your product or service that you are offering to your clients and also describe what makes your product or service unique.
- Sales And Marketing: This section is important as it gives you a glimpse into your industry like how business is acquired, market condition and general costs.
- Operations: This section helps you explain the administrative side of your business, like how you are operating, where your business is located, equipments, your staff, your network of suppliers and legal relationships.
- Management Team: This section is to describe your management team and their contributions to your business’ overall success.
- Development: As development is an important part of any business success, you need to define about your potential developments in this section.
- Financial Summary: Provide a detail of your financial dealings and investments and how you came into position you are in at present.
Personal Credit Report
Your personal credit is a significant component to determine your ability to qualify you for a small business loan. The lender will get a copy of your personal and business credit reports. However, it’s useful and also advised to get your a copy of your business and personal credit reports in advance so that you can understand what are your credit ratings and clear up errors if any.
Business Credit Report
In case you are previously in business, you should be organized to submit a credit report for your small business. Similar to personal credit report, it is also recommended to review your business credit report before starting the business loan application process.
Most business financing programs require business owners with more than a 20% stake in your business to submit signed personal financial statements. You may also need to present your projected financial statements either separate or as part of your business plan. It is very good impression to have them organized and all set if a business financing program for which you are applying calls for those credentials to be presented individual.
Many business financing programs call for one year of business or personal bank statements to be submitted as part of a loan program.
Accounts Receivable and Accounts Payable
Most business financing programs will require information of your business’ current financial functions and position. Before you start the loan application process, ensure that you’ve accounts receivable and accounts information available.
In case your business loan lender asks for collateral, take stock of business assets, along with equipment, and spot their value. This is referred to as a collateral statement and should be listed in your small business loan application. In case you’re ready to pledge your personal resources as collateral, you will need to document their worth as well.
Based on the type of lender, you may be asked to produce business formation documents, business licenses, data of pending legal claims, any previous bankruptcy information, and agreements with other businesses. Your lender may additionally ask you to present one or more of the following legal documents:
- Business licenses and registrations
- Articles of Incorporation
- Copies of contracts that you have with third parties
- Franchise agreements
- Commercial leases
Ownership and Affiliations
This include a list of names and addresses of any affiliates and subsidiaries, which include issues in that you hold a controlling interest and different uncertainties that can be affiliated by stock possession, franchise, proposed merger or otherwise with you.
Loan Application History
Loan application history consists of records in which you will describe any previous business loans you may have applied for in the past and its status.
Income Tax Returns
Most business loan programs require applicants to submit personal and business income tax returns including all the pages and schedules for the previous three years. The lender can also get a copy of your tax return directly from the IRS and can compare it with the copy that you provide to the lender.
Business Overview and History
Provide a brief history of your business, industry, products/services, and its challenges. Also provide an explanation of why the business loan is required and how it will help your business.
Include copies of your business leases and contracts, or note from your landlord, giving terms of the existing or proposed lease.