Winning Over Lenders by Being Prepared: What You Need as a Small Business Owner

Getting a small business loan can be a challenging task when presenting a valid case for lending. So what information and paperwork are you going to need when applying  to a lender in hopes that they will not only set you up with a loan, but will also get you a favorable one?

First, be confident in your loan request. Know the amount you will need to fund your growth, be prepared to discuss what opportunities and income will come from this loan, and go in prepared with statements and research to explain the costs of everything from raw materials of new product to marketing expenses. Be as detailed as possible

Whether you’re applying to a traditional or alternative lender, the following materials should be prepared ahead of time:

  • Proof of a good income record
  • Any necessary loan applications
  • Personal Background and Financial Statement
    •  Statement of Personal History
    •  Personal Financial Statement
  • Business Financial Statements (for the last two fiscal years)
    •  Profit and Loss Statement
      •  Current within 90 days of your application.
  • Projected Financial Statements
  •  Projected income and finances for the next year with an explanation of how you will attain that goal.
  • Ownership and Affiliations
  • Business Certificate/Licenses
  • Loan Application History
  • Income Tax Returns (for the last two years of filings)
  •  Business Overview and History
    •  Bring a brief statement highlighting the history of your business and its successes and/or challenges.
    •  Explain in this why you need a loan to continue its success.

When meeting with an alternative lender, you will need to prepare a few additional documents beyond those listed above. An alternative lender like Crestmark can offer more flexible funding options, and has the ability to work with businesses that would not otherwise qualify for traditional bank financing. If you’re looking to win over an alternative lender, they may be interested in also seeing the following:

  • Accounts Receivable Aging/Detailed (current month-end)
  • Customer Contact List, including city and state
  • Accounts Payable Summary (current month-end)
  • Invoices and Supplementary Back-Up
  • Purchase Orders/Contracts
  • Detailed Inventory Report, showing raw and finished goods, as well as work in process
  • Marketing brochures, informative business overview

Keep in mind that while this is a list of commonly-required documents, it’s important to check with each lender before meeting with them. Also, documentation is a good start, but it’s really only half of it. You’ll also need to be prepared to sell your business and yourself as its leader. Prove that you’ll be a valuable and trustworthy investment by showing a plan to pay back the loan, strong credit statements showing you have creditworthiness and several reasons why you believe your business has a solid chance at success with this funding.

Are you in the process of looking for a lender? We want to help, and have professionals ready to discuss your business capital needs.