Because taking out a loan is a big decision, it’s a good idea to make a small business loan checklist to ensure you’re efficiently completing the application. In this post, we'll explain how small business owners can prepare their loan application with a 10-part checklist.
10 Items to Include In Your Small Business Loan Checklist:Your small business loan checklist will include a lot of required paperwork. Before you start completing the proper forms, consider making a file for your small business loan application that’s separate from where you keep your personal documents. Completing your alternative financing or SBA loan checklist might be overwhelming at the start, but strategically tackling the project can make it a breeze. Check off the individual items one by one to get ahead on your loan application process.
1. Borrower Information FormAs the name implies, a borrower information form is used to profile the applicant seeking a term loan. It includes details such as your contact information, identifying company qualities, loan intent, business principles, and previous or outstanding loans. To get an idea of what the borrower information form looks like, you can download one from the U.S. Small Business Administration website. The form states clear instructions, and even defines key words to help applicants understand the document before filling it out. You’ll submit this form, or a similar one, to your lender once you’ve completed it.
2. Personal Background and Financial StatementIf you’re a partial owner, general partner, proprietor, guarantor or managing member of a small business, you’ll probably have to complete a personal background and financial statement. Basically, a lender wants to ensure that your personal credit score is legitimate before offering you money to help you start or improve your business. The form requires personal identification information such as your phone number and address, as well as a declaration of your current financial assets. You’ll list both your assets and liabilities on this form, giving the lender an idea of your history with investments and current approximate net worth.
3. Business Financial StatementsBusiness financial statements break down your company’s income, expenses, and general plan for managing funds. They can be a great opportunity for you to make sure your intended revenue is adding up. If you already use a balance sheet, creating a formal financial statement should be straightforward. Similar to the personal financial statement, the business financial statement will include assets and liabilities—just as they pertain to your business’s finances. There are viable business financial statement templates online, although your lender might have their own for you to complete.
4. Business License or CertificateYou’ll need to register your company with a business license or certificate before your lender considers it to be legitimate. When a business establishes itself separately from the person who started it, the legalities change. The kind of business license or certificate you’ll get is usually contingent on the specific type of business for which you’re registering. Here are some common options for business registration:
- Limited liability partnership
- Sole proprietorship