Small Business Loans Preparing Paperwork
When applying for a small business loan, it’s important to be prepared. All lending companies require the submission of paperwork and not being able to submit the complete documentations may result to delay or even rejection of your application.
What paperwork do you need to prepare? This article presents the basic or most common documents required by banks and lending institutions:
Summary of Business. The summary must include the basic information about your business such as the type of business you manage, the type of ownership, the number of employees you have (if any), your annual sales and gross income, etc.
Business plan. In most cases, start up and new businesses are required to submit a business plan. Because of the lack of business credit history or a track record, start up and new businesses must be able to convince a potential lender that their business is worth financing through a business plan. The business plan can be a 5-page document or more, depending on the type of business. It’s important to make sure that the business plan is concise, clear, and complete.
Loan Proposal. The loan proposal is where the owner of the business formally makes a request to be granted a loan in writing. Of course, the letter must explain how much of financing is needed and how the funds will be utilized if granted.
Collateral. Because they involve a large sum of financing, most business loans Personal and business financial statements. Personal financial statements and income tax return of the business owner, business partners and stockholders will usually be required. For established businesses, financial statements of the company such as balance sheets and business tax returns for at least the last two years will be required.
Cash flow projections. Lenders are also interested to know how much you expect to earn from your business for the next five or ten years. Cash flow projections along with the details must be presented in a separate document.
Other documents that might be required are Articles of incorporation, Proof of taxpayer ID number, Equipment inventories, insurance for properties used as collateral, market research data, etc. The specific documents required may vary from one lending company to another but in most cases, the above listed documents are often included.
Irish Taylor is a bussiness loan consultant with Startup Business Loans and has been providing consumers and business owners with startup business financing since 1992. For years she has helped people with credit and loan problems especially pertaining to business start up, SBA loans and Unsecured loans. Copyright 2010. Related Article: Borrowing Money To Build Your Business 
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