What you need to apply for a business loan

The loan approval process can take anywhere from a few hours to a few days. To reduce the amount of time you spend waiting for a business loan to be approved, you need to gather some of these documents to use with your application:

• Business plan and profile - This document will discuss your business type and the products you plan to sell. You must discuss information on what you plan to do with the money you are lent and provide information on how you plan to make money to re-pay the loan. The business plan must discuss information about your annual sales, workforce, salaries, date your business was established, ownership, and financial projections. A typical business report will be about 5-25 pages in length.
• Loan request - On your application there will be a section discussing how much money you need and how you plan to use this money. This information is already covered in your business plan but it is important to provide this on the actual application as well. Provide information about the type of loan you are seeking and any working capital you have available. If you can provide concise, accurate information, the loan approval process will be faster.
• Collateral - In order to receive a business loan, you must front some type of collateral. Most lenders request that you front a piece of real estate since it tends to have the highest amount of value. Other types of collateral include equity in the business, available cash, and borrowed funds. If you have business partners, list collateral information they have available at their disposal.
• Financial Records - Every application will ask for financial records like balance sheets, profit and loss statements, cash-flow projects, and receivables. Lenders will look at your financial records to see if you are current with your receivables and how much debt the business is currently carrying. They also look for the type of collateral you have used to secure loans in the past along with a list of your payment schedules. Provide the lender with financial records over the past 3 years and project your cash flow for at least 3-5 years. Your receivables should be easy to read, breaking the accounts down into 30, 60, 90, and older categories. If you use a collections company to collect on your past due invoices, be sure to make this information known in your loan application.

That concludes the list of all the business information you need to provide to your lender. You will also need to provide the lender with your personal information including the following:

• Access to your credit report and score. Lenders use this information to determine how high of a risk you are, especially if you are securing your business loan with personal collateral.


• Financial records. Lenders need to see how much money you actually make and what you report on your taxes. They will also look at your personal assets and liabilities. Normally you will need to provide them with financial records over the past 3 years.


• Proof of insurance for collateralized items. Since you will probably use your home or another piece of real estate to secure the loan, the lender needs to make sure the property is fully insured to protect their investment in you. They will also need to see legal descriptions of your property like a deed.

There may be other documents you need to provide like market research reports, letters of intent from clients, and anything else the lender asks for. Providing too much information will actually cause your loan approval process to be longer so try to keep it short and to the point.