What Do You Need to Apply For a Small Business Loan?

Funding your small business is a typical part of day-to-day operations, but it’s not always the easiest process to apply for a loan. Though SBA loans and bank business loans have a notoriously lengthy application and processing time, some lenders work hard to make the credit application process as efficient and convenient as possible. Read on to learn more about important business documents to have available when applying for a loan, as well as other common application questions.

 

What Documents Do I Need to Have When Applying for a Business Loan? 

While small business loan and/or application requirements will vary based on the borrower’s credit history, lender, location and type of credit, the following documents are helpful when applying for small business credit:    

1. A comprehensive picture of your small business’s finances, including up-to-date profit and loss statements, accounts receivable and accounts payable, cash flow, income and expense reports. You should also include your business plan and any related financial projections.

2. Business bank statements

3. Identification, including basic personal information for all business owners

4. Personal financial statements of all owners, depending on the organizational structure

5. Business and/or personal income tax returns for at least the past year

6. Organizational documents, such as required business licenses, registrations, Articles of Incorporation and/or leases

 

What are the Minimum Qualifications for a Small Business Loan?

Minimum small business loan application criteria can vary by the lender, credit product, borrower’s credit history and location. Some types of small business loans, such as online loans, may have less stringent minimum loan application criteria, like less time in operation and/or a lower annual income than bank business loans or SBA loans. In general, you can verify the qualifications for a small business loan on a business lender’s website.

 

How Are Some Small Business Lenders Able to Process Loans Faster than Other Creditors?

Some funding methods, like online lenders and alternative creditors, use technology that helps them process and review small business loan applications faster than traditional methods. One type of cloud technology is called a data transfer service. Headway Capital uses Plaid, a leading data transfer service that provides a secure end-to-end connection from business bank accounts to online financial services like small business loans and other business tools.

 

Is it Safe to Provide Sensitive Financial Information to Small Business Lenders?

Reputable business lenders take their responsibility to provide a safe, secure lending experience seriously. That’s why online lenders like Headway Capital go above and beyond to continuously monitor and protect sensitive financial information with the latest tools and software like McAfee SECURE™ and Norton Secured™. Additionally, Headway Capital uses technology that provides an encrypted connection from your bank account to financial technology like business loans and other tools.

 

Why Do Lenders Require a Business Owner’s Personal Information?

Lenders may use a small business owner’s personal financial information in order to make a more informed credit application decision, depending on factors like a business’s borrowing history, years of operation, income, and other application details. Additionally, some lenders may require one or more business owners to act as a guarantor for the loan agreement.

 

Bonnie P

Bonnie is a Chicago transplant who's committed to seeing the world on a dime. As an avid news junkie with a fascination with finance, she loves to help others do more with less.

Most Popular

ACH vs. Credit vs. EFT vs. Wire Transfer: Which Should You Use?

ACH vs. Credit vs. EFT vs. Wire Transfer: Which Should You Use?

Expert Tips to Help Improve Website Conversion Rate

Expert Tips to Help Improve Website Conversion Rate

A Guide to Social Media Customer Care

A Guide to Social Media Customer Care

How to Pivot Your Small Business to Meet New Consumer Trends

How to Pivot Your Small Business to Meet New Consumer Trends

What Small Businesses Need to Know About the Newest PPP Loans

What Small Businesses Need to Know About the Newest PPP Loans

Back to Top