When applying for a loan it is essential to make sure that you have the proper documentation in order to make to application process go smoothly. Although the documentation and requirements might vary from lender to lender a general checklist of the things that needed are as follows:
Completed Loan application The forms vary by lender but they all require similar information, including how the loan proceeds will be used (list the assets to be purchased and suppliers).
Personal credit report Lenders will obtain borrowers' credit reports, but it is highly recommended to order one's own credit report from all three major consumer credit rating agencies before submitting the loan request to the lender. If there is inaccurate information on the report, work with creditors and credit reporting agencies to correct the information. If there are derogatory entries on the credit report that are accurate, submit a formal letter with your loan application explaining the blemishes on your credit report.
Business credit report (for existing businesses)
Income tax returns for three years - personal and business
Personal financial statement of owners owning 20% or more of the business
Business financial statements (for existing businesses) - complete financial statements for the past three years and current interim financial statements
Cash Flow Projections of three years (The first year of projections should include monthly and the second and third years should include quarterly projections).
Bank statements for the last 12 months - personal and business
Accounts receivable and payable aging breaking A/R and A/P into 30, 60, 90 and past 90-day old categories –the same date as financial statements
Schedule of Collateral - description (schedule) and cost/value of personal or business property of owner(s) or co-signers to secure the loan (appraisals may be added)
Resumes of owners and officers (some lenders demand managerial experience in the field that applies to the business)
Business plan, including complete set of projected financial statements - income statement, balance sheet and cash flow statement for at least 3 years; first year must be presented on a monthly basis.
SBA documentation - all SBA loans will require to submit certain SBA forms www.sba.gov/library/forms.html
Legal documents There is a variety of legal documents that may be requested by the lender; some of the typical examples are as follows: articles of incorporation, lease agreement, contracts, franchise agreement, employment contracts, etc.
Miscellaneous information - borrower may be asked to submit additional information that lender deems appropriate, for example, list of trade creditors, and letters of reference.
The lender may ask for further information such as appraisals, leases, ect.