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10 Documents You'll Need to Get a Loan

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Business is booming. That’s a good thing, right? Not if you can’t keep up with demand. Maybe it’s time to expand. But that means a visit to your local lending institution to secure the funds.  For some, that’s a daunting experience, especially if you’re not prepared. So, how do you get a loan?

While every lending institution has its own requirements, the Small Business Administration has identified typical items that will be required for any small business loan application:

  1. Personal background – Most loan applications ask for information such as previous addresses/names, educational background, and criminal record.
  2. Resume – Evidence of business or managerial experience.
  3. Business Plan – Should include a complete set of financial statements, including profit and loss, cash flow and balance sheet. May include forward-looking projections.
  4. Personal Credit Report – Lender will request one, but you should request one before submitting the application to identify/correct any inaccuracies or blemishes.
  5. Business’s Credit Report – Like your personal report, review your own business’s credit report to identify/correct anything that might hurt your chances.
  6. Income Tax Returns – Most require personal and business returns for the previous three years.
  7. Financial Statements – May ask for personal financial statements from any owners with more than a 20 percent stake in your business.
  8. Bank Statements – Most require one year of personal and business statements.
  9. Collateral – Prepare a collateral document that describes the cost/value of personal or business property that will be used to secure a loan.
  10. Legal Documents – May include business licenses, articles of incorporation, third-party contracts, franchise agreements, and commercial leases.

In addition to these documents, be prepared to answer questions such as: Why are you applying for the loan? What will the money be used for?

Need more information? Go to SBA.gov.

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