Applying for a bank loan for your small business requires a detailed-oriented approach. You can do this! Here is a list of the thirteen essential documents you’ll need. Start working on them now and you’ll be ready.
Regardless of where you go to apply for capital, your business documents should be in order and easily accessible. From your business history to statement of debt, these should be clear, concise and accurate. Keep in mind that a lender will give more credibility to a presentation that has been reviewed by an accountant, lawyer or other professional. Here is a list of materials you will need to supplement your basic business loan application:
Business plan: Most of the following items should already be in your business plan. If not, consider adding them.
Business history: Give a brief description and history of the business, when it started, ownership, number of persons employed and products.
Personal history: Describe yourself, emphasizing your work experience and reasons why you feel qualified to operate your own business.
Management resumes: Describe the education, technical training, employment and business experience of each of your managerial employees.
Financial statements: Provide balance sheets, including current balance sheet, for the past three fiscal years. For a new business, provide a projected balance sheet. Also include a revenue and expense statement for the past three fiscal years, including a statement for the current period.
Personal financial statement: Supply a personal financial statement for each officer, principal or stockholder with 20 percent or more ownership, showing their net worth outside of the business.
Debt: List installment debts, contracts, notes and mortgages payable, showing to whom payable, original amount, original date, present balance, interest rate, maturity date, monthly payment, security and whether current or delinquent.
Income tax returns: Provide copies of federal income tax returns (IRS Form 1040) for past three years.
Accounts receivable: Show amounts due you, from whom and original date.
Loan proceeds: State amount of loan requested and explain exact purposes for which it will be used.
Collateral: List collateral to be offered as security for the loan, with your estimate of the current market value of each item.
Purchase offer agreement: Where applicable, obtain a purchase offer agreement or dealer equipment quote showing exactly what you are buying and for what price.
Earnings projection: Prepare a detailed projection of earnings.