Standard Lender Information Requirements
A standard loan application for business financing typically includes a variety of information items and documents that provide a comprehensive overview of the business's financial health, the purpose of the loan, and the ability of the business to repay the borrowed amount. Here's what a standard lender information list looks like. Not all business financing applications will require all these items depending on the capital request and lender.
1. Business Information
- Business Name and Contact Details: Full legal name, address, phone number, email, and website.
- Business Structure: Whether it’s a sole proprietorship, partnership, LLC, corporation, etc.
- Industry Type: The sector or industry in which the business operates.
- Date of Establishment: How long the business has been operating.
- Tax Identification Number: Federal EIN (Employer Identification Number) for the business.
- Legal and Trading Status: Information on any legal proceedings, bankruptcies, or trading difficulties.
2. Loan Information
- Amount Requested: The specific amount of funding being requested.
- Purpose of the Loan: Detailed explanation of how the loan will be used (e.g., equipment purchase, expansion, working capital).
- Loan Term Desired: The preferred repayment period.
- Type of Loan: Specifying the type of loan product being applied for, if applicable.
3. Ownership and Management
- Owner(s) Information: Names, addresses, social security numbers, and percentages of ownership for all owners.
- Management Team: Key management personnel and their qualifications or resumes.
4. Financial Information
- Financial Statements: Balance sheet, income statement (profit and loss account), and cash flow statements for the last 2-3 years and current interim financial statements.
- Personal Financial Statements: For each principal owner listed in the application.
- Tax Returns: Business and personal tax returns for the last 2-3 years.
- Bank Statements: Business bank statements for the last 6-12 months.
5. Business Plan
- Executive Summary: Overview of the business and its strategic direction.
- Market Analysis: Information on the business’s market, competitors, and place within the industry.
- Marketing and Sales Strategy: How the business intends to attract and retain customers.
- Operations Plan: How the business is set up operationally, including suppliers, production methods, and processes.
- Financial Projections: Detailed projections of income, expenses, and cash flow for the next 1-3 years, including assumptions made in the forecast.
6. Collateral
- Collateral List: Detailed list of assets to be offered as security for the loan, including values and any existing liens.
7. Other Documents
- Business Licenses and Permits: Copies of any required licenses or permits.
- Lease Agreements: If the business operates from leased premises.
- Articles of Incorporation or Organization: For LLCs and corporations.
- Franchise Agreements: If applicable.
- Credit Report Authorization: Permission for the lender to request a credit report on the business and its owners.
Ensuring that a loan application is thorough and well-prepared can significantly impact the likelihood of approval. It demonstrates to the lender that the business is well-managed, has a clear purpose for the funds, and has a solid plan for repayment.