Information Lenders Require for a Small Business Loan

If you’re looking around and trying to obtain a small business loan, you may be familiar with the process. It can be a little more complex than a traditional loan an individual may seek, but once you know what you’re doing, it’s not that overwhelming. Most of the time, with a loan for a business, you must put together more paperwork than you may need for other types of loans. You do need to detail your personal financial history, just like other types of borrowing, but additionally you may be required to submit company documents such as a business plan as well. In order to get the right type of loan for you, you may also need to provide lenders with information about your solid professional experience in the industry as well as detailed documentation of your business’ profit and loss statements over the years.

Solid Professional Experience

One of the things that lenders may want to see before extending credit to your business is your resume that lists all of your professional experience. Because small businesses are usually controlled by a small group of people or one person, it’s typical for a bank to seek out as much information about the owner as possible. Your resume needs to be revamped for this exact purpose to demonstrate your ability to manage and run a business into profitability. Consider this step of the loan process like an audition, and go through your current resume to make the necessary changes. If your business is owned by a group of people, it’s important to adjust everyone’s documents to showcase each individual’s talents and achievements that are relevant to the company’s purpose.

Compelling Profit and Loss Statements

Next, for a small business loan to be approved for an existing company, you need to provide statements that detail your business’ profits and losses over the years. Every business needs to run these numbers anyway, so this paperwork should be easily available for all. This is the best way for a bank to check and see how much money your company truly makes. It’s also a way to analyze the spending of your company and the fiscal responsibility that your company demonstrates. If you have never used profit and loss statements before, you may find it difficult to secure funding. Businesses that can’t figure out if they’re making revenue usually have trouble getting a loan.

A small business loan is something that many companies may seek during the life of an organization. Showing a record of success with experience and your company’s financials can make this process seamless.