Small Business Loan Application Checklist – Stay One Step Ahead
Having big business plans but no funding to materialize them can be upsetting. If so, you are most probably considering taking financing help like a small business loan.
Taking out working capital loans for small business has its pros and cons, here you’ll have the advantage of getting the required funds to grow your business with various factors such as repayment periods, hidden fees, added interest, etc.
It is always a good idea to create a checklist for a loan to ensure that you do not miss any important document.
Check out the list you’ll need to get organized for receiving fast business funding.
Breaking Down The Checklist For Small Business Loans
Any loan application requires a lot of paperwork. Prior to completing the documents, consider maintaining a separate file for your loan application and your personal documents.
Information Form Of The Borrower
A borrower information form as the name implies is used to check the basic profile of the applicant seeking quick business funding.
It includes your name and contact information, outstanding or previous loans, business principles, loan intent, identifying company qualities, and other crucial details for the loan.
Financial Statement & Personal Background
If you’re a guarantor, proprietor, general partner, managing member, or partial owner, you’ll have to complete financial statements and personal background.
Every lender wants to confirm that the information you are providing in the application form is legitimate before lending for your business.
The form requires personal credentials including your address, phone number, and the declaration of the current financial assets. You’ll mention both liabilities and assets, to give your lender an idea of your investment history and net worth of current approximate.
Business Financial Statement
It can be a great opportunity to make sure that your expected revenue is adding up. It breaks down your company’s expenses, income, and general plan for managing funds.
If you previously use a balance sheet, it should be simple and straightforward to create a formal business financial statement.
Business Certificate Or Business License
Before a lender considers your company to be legitimate, you’ll need to register it with a business certificate or business license.
As the legalities change when you independently established business.
Here are the common choices to register your business:
- Limited liability partnership
- Sole proprietorship
Registering your business is one of the most crucial parts of your loan application process. Not to forget, sometimes you’ll need some additional certificates or licenses depending on the state and industry you are working in.
The History Of Loan Applications
Every lender wants to know the history of an applicant such as how many times they access the credit or miss making the payments, on time.
A bad loan history could affect your application and inhibit the ability to get a new loan. Your loan application history (whether you have received the loans or not in the past that you have applied for) verifies any past rejected or approved loan applications.
Income Tax Returns
Income tax returns for the past three years is enough to complete the checklist for the loan application. Make sure the tax return form features the true information and signed before submitting it to the lender.
Additional Documents Needed
There’s always a possibility the lender will ask for some additional information. Here are some common possible examples you need to consider when applying for a small business loan.
- Legal Documents
- Proof of Collateral
- Bank Statements
If you have decided that you need money for your small business, the above-mentioned checklist will ensure that you will be approved for the best possible loan.