Considering applying for a business loan? wondering what documents the bank / lender may need you to provide in order to assess your business’s eligibility? we’ve gathered this list to help you better prepare for your meeting.
Preparing necessary documents is a critical step in the process of procuring financing for a business. Lenders and financing providers require various documents and information to evaluate the creditworthiness of the business and determine the risk of lending money. The following are some of the typical documents that you may need to prepare:
- Financial Statements: Financial statements are a summary of the financial health of a business, including its income statement, balance sheet, and cash flow statement. These documents provide an overview of the revenue, expenses, assets, and liabilities of the business.
- Tax Returns: Lenders typically require the business owner’s personal and business tax returns for the previous two to three years. These documents provide insight into the financial performance of the business and help lenders determine the business’s ability to repay the loan.
- Business Plan: A business plan outlines the goals, strategies, and operational plans of the business. This document provides lenders with a clear understanding of the business’s growth potential and the owner’s ability to manage the business successfully.
- Bank Statements: Lenders may also require the business owner’s bank statements for the previous three to six months. These documents show the business’s cash flow and help lenders evaluate the business’s financial stability.
- Legal Documents: Lenders may also require legal documents such as business licenses, permits, contracts, and leases. These documents help lenders understand the legal and regulatory requirements of the business.
It is important for you to ensure that all the necessary documents are accurate, up-to-date, and complete. Any inconsistencies or errors could delay the application process and negatively impact your chances of securing financing. You should also be prepared to answer any questions that the lender may have regarding the documents provided. By preparing necessary documents carefully dedicating the necessary time and in some cases paying professional help, you can increase the likelihood of securing financing with a lender or a bank.
You can apply for financing with Precise*.
The application process takes minutes and an answer is provided almost immediately. While banks asking for a personal guarantee and asset collateral may provide longer duration financing, using a short-term flexible solution with no fixed repayment amounts might be a more sustainable option for your business.
*Precise provides easy to use, technology powered, Revenue Based Financing solution aimed at helping small businesses grow in their own terms.