Home > Financing > The Business Loan Application

Business Loan Sample Application - Page 5

Total balances in all business checking & savings accounts and other business loans and equipment financing
Clearly, the lender is looking to understand exactly what your business credit and deposit relationships are and you will have to provide them with this data.  Many times a lender looking to extend you credit may check with one of your lenders to make sure that you have a good payment record and you do have the funds that you are claiming in your application.

Number of checking & savings accounts currently open at other institutions 
Here you would put in the amount of total accounts open at other banks.  Established businesses tend to have multiple banking relationships.

Do you wish to pledge you accounts receivables, inventory or equipment owned as collateral? 
Collateral is one of the Five C’s of lending and banks are always more sanguine about lending when they see that they have a safety net by which they may recover all or some of their proceeds in the event the business falters.  In loans larger than $100,000 (microcap loans), banks tend to require collateral.  The amount of collateral depends from lender to lender.  Many times business owners will pledge the accounts receivable, inventory and / or equipment as collateral.  SBA loans tend to require additional collateral and will often require the business owner to put up all business assets and their personal residence as collateral.

Amount of credit line / loan requested? 
Here of course the business owner / partner will put down the total loan amount that they are applying for.  We always recommend that you make an effort to understand what the maximum loan limits are of the lender that you are applying to and try and work within that limit.  For example many lenders do not require documentation for lines of credit of up to $100,000; thus if the business needs $150,000, we recommend that it approach two lenders and apply to each of them for a loan of $75,000 – this enables the bank to lend below it’s maximum allowed lending limits and give the application a better chance of being approved.  As always check with your Business Banker to get a clearer idea of the bank’s current lending practices.

Purpose of the loan
What are you going to do with the money? – This is the question that the lenders are looking to get an answer to.  If the use is for general purpose working capital then say that; if you are looking to buy furniture, office equipment of other items then add that in here as well.  For a new business, there may be multiple uses of the proceeds and we encourage that the applicants list all they can in the business loan application.

3. PERSONAL INFORMATION

Name
It may seem obvious but many business owners / partners make a mistake when they are filling in this seemingly easy part of their business loan application.  Please make sure that your name on the application matches to the name that you have on your driver’s license.

Title & Start Date
Here you could put down if you are a partner, director or president in the business for which the application is being prepared.  The date you began your duties in the business would also go in here.

Home phone
Many applicants like to put down their cell phone number instead of their home phone – we highly recommend that you put down your actual home phone number.  Underwriters at lenders check phone company records to verify home addresses and it is always helpful to have been at the same location for some duration.  If on the other hands you have changed residences more than 2 times in the past two years, you may want to explain that to the business banker.

<  Previous  1  2  3  4  5  6  7  8  Next  >