Small Business Loans – Pre-qualifying
Prequalifying for a Business Loan, Qualifying for a business loan requires providing the lender with a lot of financial information. However, this will not be a problem if the borrower is
Qualifying for a business loan requires providing the lender with a lot of financial information. However, this will not be a problem if the borrower is organized.
There are certain documents that a lender will want, and having these documents ready beforehand will smooth the process. Below is a list of the documents that most borrowers need to prepare before qualifying for a business loan.
Financial statements. A borrower will be asked to supply financial statements for their business. For a small business these statements are usually not audited. Rather, they are compiled either by the business owner or by the owner’s accountant. Three years of financial statements are usually required.
Personal financial statements. Small businesses in particular will be asked to provide personal financial statements for its owner (s), who may then be asked to guarantee any loan. Again, these statements are not audited, and are often simply forms provided by the bank and filled out by the owner (s).
Business Plan. Lenders will ask for a business plan to learn how the loan proceeds will be used, and how the borrower will pay the money back. The business plan can be professionally done by an accountant if the borrower can afford it. If not, the business owner can prepare the business plan by following the instructions in a book or kit.
Banking information. The business will need to list its bank accounts, including all deposit accounts and loans. The borrower should be sure that deposit accounts are not overdrawn, and that loans are paid current.
Credit reports. The lender will run a credit report on the business, and
possibly on the owner (s) as well. The borrower should check their own credit
reports before qualifying for a business loan, and correct any mistakes found.
Business Loan Application. The application will be a summary of the information
that the borrower is submitting. It will include the requested loan amount, a
summary of the financial information, and an explanation of why the loan is
needed. If the borrower has already gathered all of the other information above
then filling out the application should be easy.
Posted on: April 3, 2012, by : AfricanSisters