The specific business financial documents you’ll need to provide will vary depending on the lender, loan amount, and your business type. However, some general documents are almost always required, while others may be requested on a case-by-case basis.
Here’s a breakdown of the most common types of business financial documentation you may need to provide:
1. Basic Business Information:
- Business registration documents: This could be your articles of incorporation, formation documents, or DBA filing.
- Business licenses and permits: Any licenses or permits required to operate your business in your locality.
- Tax returns: Your federal and state tax returns for the past few years.
2. Financial Statements:
- Balance sheet: This provides a snapshot of your business’s financial position at a specific point in time, showing your assets, liabilities, and equity.
- Income statement: This shows your revenue, expenses, and net income for a specific period.
- Cash flow statement: This shows how your business generates and uses cash over a specific period.
3. Additional Documentation:
- Business plan: This document outlines your business goals, strategies, and financial projections.
- Bank statements: Recent bank statements for your business checking and savings accounts.
- Accounts receivable aging report: This shows how old your outstanding customer invoices are.
- Accounts payable aging report: This shows how old your outstanding bills are.
- Loan collateral documents: If you’re using any assets to secure the loan, you’ll need to provide documentation for those assets.
Here are some additional tips for preparing your business financial documentation:
- Start early: The sooner you start gathering your documents, the less stressed you’ll be later on.
- Be organized: Keep your documents organized and easy to find.
- Be accurate: Make sure all your information is accurate and up-to-date.
- Don’t be afraid to ask for help: If you’re not sure what documents you need, ask your lender or a financial advisor.
By providing accurate and complete business financial documentation, you can increase your chances of getting approved for a loan and secure the best possible terms.