When you apply for a small business loan, you'll be required to provide several items regarding your company and its financial situation. While it may seem difficult to get this various paperwork together, it’s good for both parties that this documentation is required: it helps ensure that the final loan you're offered is what's best for you, something that you can afford and that really fits your needs. While the exact documents needed may vary between loan types, everything on this list is virtually guaranteed to be useful during the application process.

Business Plan

In order to be granted small business capital through the SBA, you'll need to show evidence of a solid business plan to show future steps and goals. In many cases, the required information could go well beyond the business plan. Additionally, you'll need to show personal information to identify yourself, and sometimes include a resume that shows your leadership and management experience.

Credit Reports & Tax Returns

Expect the prospective lender to pull your individual credit report and the credit report for your business, if you have already started it. Before you apply, it's smart to pull your own report(s) and check them for inaccuracies. It's not uncommon for the reports to have an error or two, , and even a slight problem could have a big impact when you are applying for credit or a loan. By the same token, most lenders will want to see three years of personal and business tax returns (if you have them).

Financial Statements

You will likely need to show your personal and business financial statements to the lender. This helps them determine your small business capital needs and how much debt you can realistically afford to carry. Expect to present both financial statements of your own and documents from your current bank.

Agreements, Leases, and Licenses

If you've had to fill out any kind of official form or agreement, you'll likely need to present it as part of the loan. This applies to articles of incorporation, any kind of local business licenses or accreditations required in your area, franchise agreements, and lease arrangements. And in some cases, you may be asked to provide information on who your customers are.

This is not an exhaustive list covering every potential situation for every lender. You should always check and ask them what, specifically, they'll want to see so that you can be prepared. But if you're just starting the process and want to have some idea of what they're looking for, this list is a good starting point. 

There are many different ways to fund a business. Starting out, you'll have the option to lean heavily on venture capital or similar investment vehicles, but you may also choose to finance through more traditional loans, or potentially even to self-finance. But as your business develops, you may discover that your initial financing method isn't the one that best suits your current needs. In this kind of situation, it'll be time to look at recapitalization financing.

The Funds You Need To Restructure

Recapitalization financing is, at its heart, a way of re-organizing the way the finances of your company are structured. This can mean consolidation, but it often means adapting payment structures to better fit your current method of production. For example, it could mean switching from a more debt-oriented structure to a line-of-credit oriented one.

Changing Your Business Capital

At Crestmark, we often help our clients transfer to lines of credit as their main source of business capital. We offer four main types of line of credit. The first is an asset-based line of credit, which is secured by inventory and/or receivables. Accounts receivable financing is another common choice. This kind of line of credit is secured purely by invoices with every invoice being considered individually. Finally, the last two common options are both types of invoice factoring. Factoring offers flexible financing that functions very similarly to a line of credit but is not technically considered one. Under an invoice factoring agreement Crestmark structures your funding facility based on accounts receivable/invoices. The invoices are purchased at a discount to provide immediate availability of funds to your company

If you're interested in learning how Crestmark can assist you with recapitalization, don't hesitate to contact us. We're always looking to help business owners looking for financial solutions. 

As the economy has continued to adjust, companies are seeking ways to save money. One method they've chosen involves delaying payments to their (often smaller) suppliers for as long as they can. Sometimes it’s by asking for extended dating. Other times it’s by involuntarily stretching their payments. This delay of payment can create major problems for these smaller companies because they rely on payment to finance their upcoming work. If this situation describes your company, you need short term working capital to keep your business on track.

When this happens, the majority of your capital is essentially in limbo. You've already provided the goods or services to your client, but they're delaying payment – sometimes for months. This puts you in a tough position. Big banks aren't likely to want to get involved in loans as small as what you need, and term loans aren't the best solution for this type of situation anyway. What you need is a mechanism to smooth out the peaks and valleys of your cash needs. What you want is a line of credit, but one that's based on your outstanding unpaid invoices to your clients.

Invoice factoring is the solution for this exact situation. Invoice factoring allows your company to borrow against your clients' unpaid invoices. It provides immediate access to the money you're going to receive in the future. Because of the nature of this borrowing, it also means that you don't have to be worried about your credit. This short term working capital is secured against your client's credit rather than your own, which takes a lot of the burden off of you.

In this market, small business owners and suppliers are feeling the squeeze. Crestmark can help you get the funding you need by facilitating borrowing against your future receipts, essentially negating the payment gap and providing those funds long before your client pays. 

Getting capital is often one of the biggest struggles that small business owners face. A lot of lenders hesitate to invest in a business that hasn't achieved critical mass and  banks might resist lending to small undercapitalized companies.

The U.S. Small Business Administration (“SBA”) was created to represent business owners and help provide the kind of resources needed. As part of that, the SBA partners with regional lenders to create SBA-guaranteed small business capital loans that are available throughout the country. When you apply for small business loan programs through the SBA, you get more than just the basic required allotment of small business capital. They sometimes come with some kind of coaching, instruction, or assistance, which can be vital to help a new business get the most out of the loan.

In order to apply for small business loan programs through the SBA, you have to meet certain criteria. There are a number of different loan programs that exist. They range from those available on a broader scale to more specific loans for rural businesses or other specialized applications. The requirements for each are different, and the ways in which loaned money can be used will vary as well. 

Are all factoring companies equally capable of financing every deal? From the perspective of someone seeking credit for your business, it can be tempting to knock on the door of every bank and non-traditional lender in your area and online. But is it really better to work with anyone who will give you the kind of loan you need?

Your Field Is Unique

Immersed in the daily reality of life in your industry, it's easy to lose perspective on just how unique your business really is. The flow of revenue for the transportation industry – punctuated by delays, spiking gas prices, and lag time between payments – is very different from the expected pattern in a staffing agency, which in turn is different from a retail business. Because non-traditional lenders are often relying on these patterns to provide financing, it's vital that they have an understanding of what to expect. Your explanations may not tell them what they need to know.

A Specialized Company Has Custom Solutions Ready To Go

Many fields have developed specific lending practices that are unique within that industry. For example, trucking has freight bill financing and fuel cards. Government contract financing has to understand the additional paperwork and disclosure requirements that are necessary when working with federal or state organizations. A company that has worked with your field before knows what to expect and has already created unique solutions that are designed specifically to meet your needs. You just won't find that level of service in factoring companies that don't know your business.

Crestmark has always been proud of our customized offerings for fields like staffing, manufacturing, transportation, apparel, and government contracting. Even when we don't have prior experience in your field (a rarity considering the diversity of our staff and years of lending across industries) we know the questions to ask in order to provide you with the right non-traditional lending tools for your needs.