Small Business Loan Application Checklist - How To Get Ahead - Fora Financial
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Small Business Loan Application Checklist - How To Get Ahead
November 28, 2019
Small Business Loan Application Checklist

Small Business Loan Application Checklist - How To Get Ahead

Do you have big plans for your small business, but no funds to make them a reality? If so, you’ve probably considered financing options like taking out a small business loan.

Although many small business owners do so, taking out a loan has its pros and cons. You’ll have to balance the benefits of receiving the funding to grow your business with factors like added interest, hidden fees, and strict repayment periods.

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.

Ready to get a head start on getting loans for small businesses? Here’s a breakdown of what you need to get organized. 

Breaking Down The 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.

Borrower Information Form

As 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.

Personal Background and Financial Statement

If 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. 

If you’re applying for an sba loan, you can view the personal background and financial statement form on the U.S. Small Business Administration website. 

Business Financial Statement

Business 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. 

Business Financial Statement

Business License or Certificate

You’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:

  • C-corporation
  • S-corporation
  • Limited liability partnership
  • Sole proprietorship

Registering your business is a key part of the small loan application process. Keep in mind, it’s possible that you’ll need additional licenses depending on the industry and state in which you work and live. You can apply for Federal and State Business Licenses on the U.S. Small Business Administration website. 

Your Loan Application History

If you were lending someone money, you’d probably want to know about their history of making timely payments to lenders and how many times they’d tried to access credit. The same concept applies to obtaining a small business loan, as your loan application history could affect your ability to get a new loan.

Whether or not you’ve received all loans you’ve applied for in the past, your loan application history statement verifies any past applications for small business loans. This information helps lenders decide whether or not you’d be a good candidate for a loan.

Income Tax Returns

Providing your income tax returns is key when applying for a loan. To complete this part of your small business loan application checklist, you’ll need to provide your business personal income tax returns for the past three years. Make sure the tax returns are signed, and feature the correct information before submitting to your lender. 

If you need to correct or update any information on your business tax return, you can do so by filling out Form 1040X of redoing Form 1120S — both of which are provided by the IRS. 

Resumes for All Partners

Each principal member of your business will need to submit a personal resume to the lender. Different from a resume intended for a job application, you’ll want to structure a new resume just for the loan application process. The lender uses resumes as a quick way to get to know you better, including your professional past, qualifications, and business goals. 

Your resume is a great opportunity to flaunt your skill set and ability to launch a successful business. Don’t be afraid to list qualities that frame you in a positive light when completing your personal loan application resume. 

Business History and Overview

An important aspect of your application checklist is the business history and overview form, which are used to communicate overarching vision and business goals. When applying, your lender will want to know how you’ll use your business loan, and asks for a brief history and overview of your business plan to verify legitimacy. 

Four people discussing financial statements

Business Lease (If Applicable)

If your business has a brick-and-mortar space, you’ll need to provide a copy of the lease. Your lender will review the terms and conditions of the lease to confirm that your company has a fitting rental agreement. This portion may not affect you depending on the type of business you own. For example, if you’re seeking a loan for your eCommerce business which operates completely online, not providing a lease is understandable. 

Additional Documents Needed

No matter how prepared you are, there’s always a chance the lender will request additional information. Here are some common examples of additional documents you’ll need when applying for a small business loan.

Legal Documents

It’s smart to hold onto any legal documentation pertaining to your small business, as your lender could request a copy at any time. From articles of incorporation to legal agreements and contracts, you’ll probably need to additional legal documentation at some point in your journey to getting a loan. Do your best to anticipate what you’ll need later, keeping any and all legal documents just in case you need them. 

Proof of Collateral

Securing your loan might require that you put up an item of value as collateral. Not all loans are contingent upon offering collateral, but you’ll probably need to offer proof if yours is. If you do need to prepare a collateral statement, write down a description of the item of value including exactly how much it’s worth in the current market. 

Bank Statements

Your lender might ask for bank statements from the previous year. In fact, it’s relatively common for lenders to ask for one year of personal and business bank statements before completing the loan process. Usually used to verify financial information, bank statements can also give the lender perspective on your spending habits—both professionally and personally.

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Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author's alone, and have not been reviewed, approved, or otherwise endorsed by any of these entities.

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Fora Financial is a working capital provider to small business owners nationwide. In addition, the Fora Financial team provides educational information to the small business community through their blog, which covers topics such as business financing, marketing, technology, and much more. If you’d like to see a topic covered on the Fora Financial blog, or want to submit a guest post, please email us at [email protected].