Small Business Loans Checklist - Getting Ready for Financing Page 1

Getting ready for a loan application takes a significant amount of effort and planning.  Some of the planning may require the borrowers to start working months ahead of actually applying for a loan.  In this section we will take you through the most common mistakes made by business owners / partners when applying for a loan and how you can correctly prepare your loan package to give yourself the best chance of getting approved.  Presented below are most of the items you need to get ready for a business loan: 

1.  Business Plan: 
The single most important item that you can have in your business loan application package is a professionally created business plan that adheres to the preferred SBA format and is accepted by bank and non-bank lenders all over.  The most common mistakes that business owners / partners make is to underestimate the significance of the business plan and rely on a few pages of loosely put together documentation that is a caricature of a real business plan.  The best investment you can make is to have your business plan written by plan writing professionals at Trident Consultants Inc.

2.  Loan application:
The second most important element of the loan package is a thoroughly and thoughtfully completed loan application package.  To get a detailed breakdown of the questions that you will face in a business loan application and how to go about answering each of them please look at our section entitled The Business Loan Application.  Every item in the loan application if not answered correctly and completely can potentially affect the lending decision.  In general lenders like to see a well-filled out application – by that we mean that the fewer blank lines the better.  Take time to fill out the seemingly innocuous details like middle name, prefix, suffix etc.  Where ever you have the opportunity, make sure you enumerate what it is you do and why you need the money. 

3.  Personal Taxes for 3 prior years:
Most lenders will require that you provide them with three years worth of personal tax returns.  While some may only require you to provide two years worth, any SBA loan will certainly require three.  Please make sure that the returns that you provide the lender are duly signed by you and your spouse (if applicable) and also has the name of the preparer and a telephone number for them.  Make sure that you include all pages of the federal tax returns.  Remember that many lenders require you to sign an IRS form 4506-T that gives them the right to request a copy of your filed returns from the government to verify the information that you are providing them on the business loan application is indeed accurate and true.

4.  Business Taxes for 3 prior years:
In the event you are an existing business looking for a new or additional lines of credit or a business loan, you will need to provide three years worth of tax returns on the business entity that operates the business in whose name you will be applying for a loan.  In the case of new businesses of course this option is not possible but you will need a sound business plan that shows pro-forma financial statements for the next three years.  If you are an existing business and are submitting business taxes please make sure that they are duly signed by you or the authorizing officer for the company and have the name and number of the tax preparer and also make sure that you have included all pages of the tax return for the lender to review.

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