Documents you need for a small business loan

Before you apply for any kind of small business loan — be it with the Small Business Administration, or SBA, a bank, or even family or friends — be prepared by gathering up all your bookkeeping, financial and other records. It will make the business loan application process less stressful and more likely to be approved by the lender.

Here’s what you’ll need:

1. Personal credit report. This is not for lenders, who can obtain this information on their own, but for you. Know your credit rating from one of the three major credit-reporting companies: TransUnion, Experian and Equifax. Once you get your credit report, make sure you dispute any errors, and be prepared to explain the reasons for late payments or defaults on your history.
2. Business credit report. Just like your personal credit history, it’s important to look this over and correct any errors before you apply for a small business loan.
3. Loan application form. Get this from the lender and fill it out completely. The questions on the form will vary from lender to lender, but basically questions include: Why do you need a small business loan? What are your plans for the money? What other business debt/creditors do you have?
4. Business financial documents. Gather up your past tax returns (previous three years), one year of bank statements, a balance sheet, income statement, cash flow statement, accounts receivable and accounts payable.
5. Business legal documents. Not all lenders require this kind of detailed documentation, but have it handy just in case:
   • Any legal contracts with third parties.
   • Licenses, registrations.
   • Articles of incorporation.
   • Lease agreements.
   • Taxpayer ID number (proof of).
   • Equipment inventory (with serial numbers).
   • Collateral (cost/value of business — and personal — property that you plan to use to secure the loan).
   • Proof of insurance for any collateral property or items.

Gather all this information in one place to get it ready before you submit your small business loan application. You will have it at the ready — and create less stress and anxiety for yourself — if your lender requests it. But, remember, keep the process simple by only giving your lender the specific paperwork requested.