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Documents you need for a small business loan

Not all lenders require the same documents, so you want to ask what information they’ll need before you apply. However, you’ll generally need the following:

Personal credit report

This is not for lenders, who can obtain this information on their own, but for you. Know your credit rating from one of the three major credit-reporting companies: TransUnion, Experian and Equifax. Once you get your credit report, make sure you dispute any errors and be prepared to explain the reasons for late payments or defaults on your history.

If you’re just starting out in your business, the lender will likely determine your eligibility for funding based on your personal credit history and credit score. Lenders want to know that you’re a good risk and estimate the likelihood of you defaulting on a loan.

Since the most competitive interest rates usually go to the borrowers with good or excellent credit, you want to ensure the information on your credit report is correct. Otherwise, your application for a small business loan could be rejected, or you could get approved for funding with a steep interest rate.

Quick note: Even if you’ve been in business for some time, some lenders may review your personal and business credit history before approving for a loan.

Business credit report

Just like your personal credit history, it’s important to look this over and correct any errors before you apply for a small business loan. Furthermore, business credit reports can also demonstrate that you’re financially responsible and have a track record of paying business debts on time.

Business financial documents

Gather up your past tax returns (previous three years), one year of bank statements, a balance sheet, income statement, cash flow statement, accounts receivable and accounts payable.

Lenders use this information to assess your company’s financial health and determine if its overall performance is trending in the right direction. Even if your company has experienced a recent decline in sales or overall profitability, you should be transparent with the lender. Explain how additional funding will foster growth and reverse the negative trend. It’s equally important to share how you’ll execute the plan to achieve the projected positive outcomes.

Business legal documents

Some lenders won’t require this kind of detailed documentation, but have it handy just in case:

- Any legal contracts with third parties
- Licenses, registrations
- Articles of incorporation
- Lease agreements
- Taxpayer ID number (proof of)
- Equipment inventory (with serial numbers)
- Collateral (cost/value of business — and personal — property that you plan to use to secure the loan)
- Proof of insurance for any collateral property or items

How to check business credit score? How can CreditPush help my small business get a loan? CreditPush gives you actionable insights to help your credit score improve, making any credit application more likely to be approved. In addition, CreditPush gives you easy access to a wide range of high quality credit products tailored to your small business’s credit needs. These products may include small business lines of credit, secured business credit cards, or new business owner loans.
MaryDuke 19 september 2022, 9:18
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