When you apply for any loan, the lender needs information to figure out if you’re likely to repay the loan. When applying for an unsecured business loan, the lender will want details about both your business and you personally.

Unsecured business loans, especially from online lenders, usually have faster application processes than secured loans because you don’t have to deal with collateral. But that doesn’t mean that you won’t need paperwork. Having the right documents ready can help the process go smoothly.

Information about yourself

To get an unsecured loan or line of credit for your business, you’ll first need to prove that you’re the company’s owner and authorized to borrow on its behalf.

If you’re getting an unsecured loan, the lender will also likely check your personal credit and finances, especially if it’s demanding a personal guarantee for the loan.

Be ready to provide:

  • Proof of identity: A driver’s license or similar. Every lender will want this to make sure you’re who you say you are.
  • Personal bank statements: This is less common, but they may ask if you’re offering a personal guarantee. It backs up your promise to pay the loan if your business can’t.
  • Tax returns: Few lenders will ask for these unless you have an unusual financial situation. But it doesn’t hurt to have them handy.

Usually, the lender will check your credit, so you don’t have to have a report ready yourself. Almost every lender will check your personal credit, especially if you’re offering a personal guarantee. But since your personal credit is an important factor of determining your eligibility for small business loans, it’s smart to check your score yourself before applying.

Bankrate tip
A personal guarantee is a legally binding promise to use your personal assets to repay a loan if your business defaults on it. They’re common on both secured and unsecured loans.

Documents about your business

When you apply for unsecured business loans, lenders will want to take a look at your company’s financial situation and history. You’ll need to have these documents ready.

  • Business formation information: Details like your company’s employer identification number, ownership and business structure are required for every loan. This ensures your company is legitimate and you’re representing it properly.
  • Credit report: Like your personal credit report, the lender will obtain this on their own, but it’s worth checking your credit before applying to see if there’s anything you can improve.
  • Financial statements: Lenders will commonly ask for the most recent bank and loan statements for your business to make sure you can afford the new loan.
  • Balance sheet: Lenders usually ask for this document to make sure your company isn’t deep underwater in debt.
  • Tax returns: If you’ve been running your business for a while, lenders will ask for these to check long-term performance. A history of steady or rising revenue and profit is good.
  • Business plan and projections: Needing these documents is less common, but some lenders will ask, especially if you want a large or long-term loan or if your company is quite new. Having a strong plan and reasonable projections can help give the lender confidence that your company will become or remain profitable.

The bottom line

Though unsecured business loans are usually faster and easier to apply for, you’ll still need some paperwork ready when you apply. Have these documents ready so you can get through the application process quickly. Also, be sure to shop around and compare multiple lenders to get the best possible deal.