Small Businesses: Documents You Need To Apply For SBA Loans
Paperwork! It’s the bane of small business owners. And applying for a small business loan from a bank can bring with it a flurry of required information.
Do you know the information needed to complete a bank loan application? Here’s a list from SmartBiz to make the process less painful. Each bank loan program has specific requirements but much of the necessary information is the same.
First, create a checklist to streamline your process and start gathering!
Personal Background/Resumes: Information needed includes your business background as well as previous addresses, names used, criminal record, educational background, etc.
Business Plan: Though SmartBiz doesn’t require a business plan, your bank may require one. And if you need help preparing a business plan, there are free or low-cost resources available. Check out your local SBDC office; they can help.
Personal and Business Credit Reports: Be sure to obtain a credit report from all three major consumer credit rating agencies – Equifax, Experian and TransUnion. If there are inaccuracies, try to resolve before getting started.
Income Tax Returns: Most lenders require the previous 2-3 years of business income tax returns.
Financial Statements: Owners with more than a 20 percent stake in a business are often required to submit signed personal financial statements. Business financial statements have three components 1) Profits and loss statements. 2) Cash flow statements 3) Balance sheets (though SmartBiz only requires #1 and #3).
Collateral: Requirements for collateral vary – some bank loan programs don’t require it, others with do. Have a document prepared that describes personal or business property that can be used to secure a loan.
Legal Documents: These documents can include business licenses, Articles of Incorporation, 3rd party contracts, franchise agreements and commercial leases.
An Eligibility Summary is located on the SmartBiz website listing specific requirements for our loans including business requirements, cash flow needed, liquidity, personal credit, public records and specific SBA criteria.