Required Documents for Business Loans

Business loans might just be what you need to manage your cash flow, get better business equipment, or even grow your business. Each lender, be it a bank or a credit union, has a set of requirements, eligibility factors, and criteria to follow before deciding to approve your loan.

Collecting necessary documents before applying for a business loan is a major challenge. Yet you have to do it anyway since you cannot access those funds without the required documents.

The checklist below should help you gather all the necessary documents before reaching out to a lender.


Documentation You’ll Need for an SBA 7(a) Loan

The Small Business Administration (SBA) 7(a) loan program is one of the most common loaning options amongst small businesses. Although the SBA doesn’t provide any loans, it guarantees a portion of the loan taken.

SBA loans are extremely attractive to borrowers due to their low-interest rates. Once you decide to apply for an SBA loan, you will need to gather all the necessary documents before initiating the process.

Below are all the documents you will need when submitting your SBA 7(a) loan application form.

  • SBA loan application: For starters, you will need to fill out the SBA loan application form with honesty and accuracy.
  • Personal background and the financial statement: Retrieve a statement of your personal history form and a personal financial statement form from the SBA website and fill them out. The SBA will use them to evaluate your eligibility.
  • Business financial statements: prepare and include a profit and loss statement and projected financial statements in your application. These will demonstrate your credibility and ability to repay the loan, so ensure they are recent.
  • Ownership and affiliations: if you have subsidiaries or affiliates, list their names and addresses.
  • Business certificate/license: include your original business license, certificate, or any other permits that allow the operation of your business. If you run a corporation, stamp your corporate seal on the application form.
  • Loan application history: include records that reflect your loan application history
  • Income tax returns: include signed copies of your personal and business federal tax returns dating three years prior to your loan application.
  • Business overview and history: Include a brief history of your business, including challenges faced. Provide an explanation of why you are applying for the loan and how you aim to use it.
  • Business plan: develop a comprehensive business plan explaining what your business is about and how you intend to use the loan. Ensure you dive deep into the details while explaining how you foresee the success of your business.
  • Income tax returns: include documents of your signed personal federal tax returns as well as those of your business. They should go as far back as three years.

Alternative Lenders

Alternative lenders can come in handy if your business doesn’t fulfill the traditional financing requirements of banks. They provide loans even for relatively new businesses.

Alternative lenders have much less intensive paperwork that can be completed online. Below are the documents you will need to submit when applying for a loan with alternative lenders.

  • Tax returns: submit three years of signed federal income tax returns, both personal and for the business.
  • Bank Statements: provide three of the latest bank statements from your personal and bank accounts.
  • Cash flow statements: submit your business’s balance sheet, profit-and-loss statements, and cash flow statements.
  • Personal identification: Include your social security number, driver’s license, and other useful government identification you have
  • Business lease: include a copy of your business lease or a note signed by your landlord

Peer-to-Peer Lending

Peer-to-peer (P2P) lenders use platforms such as Prosper and Lending Club and Funding Circle to fund loans using money collected from institutional investors and retail capital.

Over the years, P2P lending has gradually but steadily gained more popularity as a funding option for many small businesses.

Listed below are the necessary documents you will need to submit during your loan application.

  • ID Documents: Have your identification documents ready to arrange direct credit soonest possible.
  • Social Security proof: Include your Social Security award duplicate.
  • Pension or annuity income proof: If you gain earnings from a pension or annuity, provide a copy of your latest statement or award letter.

Online Marketplaces

Fundera and Biz2Credit are two of the biggest online marketplaces. They function similarly to exchange programs by integrating and restructuring the loan application process, connecting borrowers to various lenders.

To apply for a loan with an online marketplace, you would need to provide the following documentation:

  • Personal background: provide proof of your ID and address alongside your Professional qualification proof.
  • Income tax returns: include documents of your signed personal federal tax returns as well as those of your business. They should go as far back as three years.
  • Signed application: Submit all vital information about you and your business
  • Bank account statements: provide three of the latest bank statements from your personal and bank accounts.
  • Business lease: include a copy of your business lease or a note signed by your landlord.

Financing is and will always be a vital part of a business. It is important that business owners stay well informed on important details about the loan application process and the various options available to them.

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