Small Business Loans Checklist - Getting Ready for Financing Page 2

5.  Personal Financial Statement:
Besides the tax returns and business loan application forms, many lenders also have a separate personal financial statement (PFS) from that you have to complete.  All the questions that you will face in the personal financial statement are covered under our section entitled The Business Loan Application.  Make sure that your personal financial statement is dated and signed by you and the information provided in the form corresponds with the information on your tax returns.  You may need to consult with your certified public accountant (CPA) before you fill out one of these.

6.  Management Resumes:
While most lenders require personal financial statements from all shareholders who own 20% or more of the business entity, we highly recommend that you include management resumes of all the key players in your business enterprise along with a cover letter that explains the various roles and duties of each individual.  It is important to note that this information should match up with the management section of the business plan that you will be submitting in the package.  The SBA has separate forms for resumes of all applicants and require a detailed breakdown of work experience, education and other information that can help them in determining the character and expertise of the guarantors.

7.  Purchase agreement:
In the event you are buying a business you will need to provide the purchase agreement that governs the transaction.  Although it may sound obvious, do take some time to make sure that the purchase price is the same as stated in the application and the purchase agreement has been executed by both you the buyer and the seller or their representative.

8.  Leases & cancelled checks:
In the event you are buying a business that includes a lease to a property that you will be occupying, the lender will need to take a look at the lease to make sure that the rental payments in the lease are properly accounted for in the calculation of debt service.  In addition banks may also request copies of rent checks (both front and back) to be provided in the business loan application.  We recommend having at least six months worth of these cancelled checks ready to go in the event the bank makes this request.

9.  Environmental Documents:
The purchase or startup of businesses that have environmental issues always requires an environmental questionnaire – please make sure you check with your business banker and include this form in your package.

10.  Photographs of new location, business:
If possible and if applicable make sure that you provide the banker taking your application with photographs of the new business that you are purchasing or the property where the business is located.  Business owners buying hotels, motels, gas stations, Laundromats, deli’s, restaurants, fast food franchises and any other business that has a physical presence should always try and include photographs of the location that they are looking to buy or where they are looking to startup their new venture.

11.  Personal bank & securities account statements:
While this does not happen very often, many times when a business owner / partner gives a personal collateral or offers up other personal assets up as collateral for a business loan, the lender will require recent bank statements and / or statements of retirement funds, IRA’s etc to verify the assets available for collateralization.  Banks also get a chance to use this information to sell you other personal banking products like investments and insurance.  When submitting personal bank statements and securities accounts, please make sure that you include all pages of the statements for the lender to review.

12.  Business bank statements:
If you have an existing business and are applying for a business loan or line of credit, most lenders would like to have the opportunity to have your entire banking business which includes the business checking account, savings account, money market accounts – in other words the entire banking relationship.  When evaluating a loan, many regional and smaller banks tend to look at the entire banking relationship and will ask you for copies of your business bank statements to see if could bring more to the table than just get a loan from them.  Very often even if you have some weakness in your application, if you have a substantial cash flow and decent deposits in your business checking accounts, the lender may approve your business loan as long as you bring your entire banking relationship to them.  If you are submitting business bank statements make sure that you include all pages of each month being submitted.  

<  Previous  1  2  3  Next  >