10 Things You'll Need If You're Going for a Business Loan!
To start or grow any business, you'll need funding and most businesses are funded through three sources: personal savings, loans from friends & family and commercial loans from banks.
If you've already tapped through the personal savings and the friends and family, it' time to get ready for that first commercial loan. And like any project, preparation is half the battle.
While every loan program is slightly different and will have different forms required for application, you will likely need to submit much of the same information for any loan application so it's best to begin to compile everything right from the start.
According to the Small Business Administration (SBA), these are the typical documents you should have ready for your first visit with a banker:
1. Personal Background
- Either on the loan document or separately, you'll be asked to provide personal background info such as previous addresses, educational background, maiden name, etc.
- some lenders require some business experience as part of the application especially in startups or acquisitions.
3. Business Plan
- all loan programs require a solid business plan that includes a complete set of financial statements and market data
4. Personal Credit Report
- It's wise to get a copy of your personal credit report from a free credit report site before you make application. This gives you the opportunity to fix errors or be prepared to explain negative entries. The lender will order their own copy as you make application
5. Business Credit Report
- If you are already in business, you may be required to submit a credit report for your business. As with your personal report, it is wise to know what is on it before making application
6. Personal Financial Statements
- Most lenders will require you to state your personal financial holdings with this form. Any partner owning more than 20% of the business will usually be required to submit similar statements and sign the guarantee.
7. Income Tax Returns
- Almost all lenders will require at least 3 years of both personal and business tax returns. Have them ready
8. Business Financial Statements
- In addition to the business tax returns, lender usually will require monthly financial statements for the interim months between year end
9. Bank Statements
- Often lenders require 6 months to a year of bank statements to verify income.
10. Legal Documents
- There may be some variation here but a lender may require one or more of the following legal documents: i. Business Licenses or registrations ii. Articles of Incorporation or Articles of Organization iii. Shareholder or Operating Agreements iv. Contracts with third parties v. Franchise agreements vi. Commercial leases
Lenders appreciate entrepreneurs and business owners that are prepared and know what to expect. Gather all these forms first and make your first visit to the bank a pleasant one.
Understanding that these steps can be confusing , I’m here to help as you walk the journey of entrepreneurship. I have a simple checklist of questions for potential entrepreneurs that I’m happy to share with you. Please shoot me an email or give me a call and we’ll set up a time to get started! Contact David Oetken, Center Director at the Louisville SBDC, (502) 625-0123or email me at firstname.lastname@example.org
Louisville SBDC, you've just been awarded the Sutton Landry State Star; what's next?
We're Going to Disney World! (well, not exactly)
In early July the Kentucky Small Business Development Center announced that the staff of the Louisville office would be the recipient of the 2016 Sutton Landry State Star for Kentucky.
Our staff will be recognized at a private reception during the America's Small Business Development Center conference in Orlando in September. The America's SBDC honors a star from each state's SBDC annually. The award is normally presented to an individual; for Kentucky this will mark the first time an entire office has been chosen. Selection is based upon who is considered an example of excellence, makes a significant contribution to their center's program and exhibits dedication to assisting small businesses.
"The Sutton Landry State Star is an honor recognizing outstanding performance and commitment in serving Kentucky's small businesses and the KSBDC network. The Louisville SBDC is a shining example of success, commitment and innovation. The center's staff works incredibly hard for their clients; they make us very proud," said Becky Naugle, state director.
Struggling with your Business Plan? Being prepared is a key success factor when searching for a business loan and knowing what to take to the bank is important. Having a solid business plan takes time and preparation. If you need help with your business plan, that is what we do. We can help you build a solid business plan complete with detailed financial statements and up to date market research. We work with you every step of the way until the plan is ready and more importantly, you have a well-planned business. Most importantly, all our services are free.
Whether you're first stop is the bank or a wealthy uncle, they'll want to know that you've done the research and planning necessary that will make your venture a success. Schedule an appointment with one of our consultants today. Press the Get Started Now button below:
Vallorie Henderson presented at the City's Power Up event earlier this month. Great turn out!
Toni Sears at Louisville Free Public Library's recent Entrepreneur Fair. Mayor Fischer kicked off the event. Various regional agencies were on hand to provide information to budding entrepreneurs.
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Funded in part through a cooperative agreement with the U.S. Small Business Administration. All opinions, conclusions or recommendations expressed are those of the author(s) and do not necessarily reflect the views of SBA. Reasonable accommodations for persons with disabilities will be made if requested at least two weeks in advance. Contact your local service center to make arrangements.