CHECK LIST

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With most of commercial loans there are certain things that you should have in the ready:

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1. Personal Credit

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Yes, when requesting a commercial loan, personal credit MAY play a big role in the decision of a lender to provide funds. (some loans will not require personal credit info)

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Personal Credit is a solid indicator of what the person in charge will do with the finances of its business. Since personal credit is a good evaluation of the payment history, commercial lenders can evaluate objectively how well they believe that person will handle the money that is given for commercial expenses.

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Although you do not need your actual credit report, it is absolutely important to know personal credit scores.

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2. Commercial Credit

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In the same way, you should know what your Commercial Credit score is, as it will affect its possibilities of assuring a commercial loan. Checking your scores with Dun and Bradstreet is a good start.

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3. Personal Information

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Be ready to divulge personal information to your list of cross-checks, such as your personal name, addresses, SSN, etc…

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Be aware that if you are requesting an SBA loan, the personal information part of the process is much more intensive.

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4. Commercial Information and Licenses

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Documents which show the company’s legal status, type of the entity and Employer Identification Number (EIN) will need to be provided.

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5. Two years of Tax Returns, Both Personnel and Business

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A big part of the loan request process demands proof of income. They want to know the security of  your business.  How do they do this? By looking at the company’s income statements.

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6. Recent Commercial Bank Account Statements

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Almost every lender will ask to see commercial bank account statements. Obviously, your bank account statements can reveal whether the business is liquid. Mainly, the statements will show the lender that the business can pay the loan while keeping its doors open for business.

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7. Profit and Loss Statements

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Lenders will request recent Profit and Loss Statements as another way of verifying the income of your business. Have these available.

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8. Cash Flow Forecast

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Since cash flow is one of the most important indicators of the financial health of its business, the prognosis of the flow of funds helps lenders to see how he believes that the future will look. Some lenders might ask you to provide projections 12 months, and others might ask for 3 to 5 years.

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9. Debt Schedule

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When you are scheduled to pay commercial debts provide lenders with a picture of how the company will handle its existing debts. Your list of debts should include payments to rentals, loans, contracts and any other debt that the company pays.

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10. Use of Loan

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It is important for the lender to know what exactly what you will be doing with the money. The loan funds must be exclusively for business use.

Providing the lender a good picture of the reason for the loan, will greatly increase the likelihood for the loan approved. In case of working capital, you’ll need to explain the kind of projects you’ll be intending to complete.

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11. Business Plan

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A business plan shows the lenders what the company does, is doing, and will do, for years to come. The plan should provide a polished image of the company, the principals, the strategies, the targets, and the methods that it will use to carry out the company’s targets and goals. This is especially important for new businesses that do not have a past business history.

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