The documents you need to provide when applying for a business loan will depending on a range of factors, such as the type of loan you are applying for, the amount you are trying to borrow and how long you have been in business. With so many people asking ‘what documents do I need to provide?’ we thought it would be useful to provide this useful guide.
A business plan should start within an executive summary, which gives an overview of the business, alongside its aims and objectives. You should explain how the business its managed and the strategies you have in place for sales and marketing.
Explaining how the loan will be used to grow the business is one of the most important aspects, as it will show that you are able to meet the repayments. This can be achieved by including detailed financial statements and projections, which show clearly the projected income.
There are a variety of financial documents which will be required during your loan application. The lender will aim to build up a detailed picture of your finances both now and in the future. This information will be used to calculate how much you can afford to borrow and how long it will take to repay.
Most lenders will want to see the last two years’ worth of bank statements, as these will support the financial details provided during the application. In addition, you may be asked to provide profit and loss statements alongside balance sheets, which will clearly display your financial position, capital, assets and any liabilities which the business has.
If your business has been trading for less than a year, the lender is likely to require proof of your personal tax returns and even details relating to your personal assets and liabilities, including your home, car any outstanding debts.
Depending on the risk associated with lending to your business, you may have to provide assets as security. The lender will want to know the value of these assets so they know how much they can lend to you. This means you will need to provide proof of ownership and value during the application.
Although it is not necessary to include a copy of your personal and business credit reports, it could improve your chances of being approved. If there are any areas within your credit report which could cause an issue, you will be able to explain these during these application by including notes within your credit reports.
If you would like the lender to release the funds to your quickly, having these documents ready to provide will speed up the underwriting process. To find out more about the loans we have available and the application process, please contact our knowledgeable team today.