Finding Solutions for Growing Businesses
COMMERCIAL LOANS
THE PACKAGE ITSELF
The business description Includes:
- A description of the product or service you provide
- An overview of key personnel and their background
- A competitive overview of your market
- Your future plans
Financial Information Business Financial Statements Include:
- Balance sheet
- Income statements
- Other necessary information
The form of business ownership you select, the type of business you are in, and the length of time you have been in business will determine the types of financial statements your lender will want to see. Additional information required by a lender might include a copy of your lease, a copy of a loan note from an existing debt, or other relevant information. The following is a guide to the most commonly requested information.
If your business is more than three (3) years old:
- Three (3) years of financial statements and business tax returns
Less than three (3) years old:
- All financial statements and business tax returns to date
Just starting:
- Opening balance sheet
- Projections
Financial statements help you communicate your financial condition and the results of your operation to a lender. These statements should be prepared in accordance with professional standards ("generally accepted accounting principles") so that they can be easily understood. A Certified Public Accountant (CAP) or business consultant can assist you in preparing the necessary information. Although someone else may prepare the information for you, it is vitally important that you thoroughly understand all the information your financial statements contain. This is necessary both to manage your business and to answer any and all questions your lender might have about your statements.
Personal Financial Statements Include what you:
You may also be asked to provide your personal tax returns, generally for the last two years. Your business and personal finances are closely intertwined. To accurately evaluate your loan request, a lender must have a very clear idea of the relationship between your personal and business finances. To answer a lender's questions, you must thoroughly understand the information presented in your personal financial statement. Lenders often supply you with a form to provide them with much of this information.
Written Loan Request
Your loan request will include many types of information (see the following checklist.) It must answer two important questions for the lender:
- What specific purpose does the loan fulfill?
- How will you repay the loan?
Is Your Package Complete? -A Checklist
To ensure a thorough analysis and timely reply by a lender you must provide complete information. The checklist below will help you review the components of your own loan package.
Purpose of Loan
Business Description
- Description of product/service
- Management overview
- Competitive overview
- Future plans
Business Financial Information
- Balance sheet(s)
- Income statement(s)
Personal Financial Statement
Personal Income Statement
- Tax return(s)
- Current payroll statement (if employed elsewhere)
Written Loan Request
Supporting Documents (as applicable)
- Agings of accounts receivable and accounts payable
- Copies of lease(s) purchase agreements
- Plans and specifications for real estate construction
- Copies of contracts with your customers and/or suppliers
- Equipment appraisals
Continue to How A Lender Uses It
Back to Online Publications
Back to Welcome Page