Applying for a new business loan need not be a unpleasant experience. By eliminating your limiting beliefs and preparing for the meeting in advance you have every reason to feel confident.
Remember, that the bank wants to lend money, they really do. They are in the business of making new business loans. In fact banks love to make new business loans because businesses are very good customers and make a lot of money for them.
Supporting Documents Needed for a New Commercial Business Loan
Your bank will expect to see a complete business plan plus:
• financial projections including income statement, balance sheet, cash flow projections, your resume or bio.
• personal net worth statement (include a separate list of assets and liabilities if there are a lot of items).
• copy of your personal identification and social insurance number.
• copy of either your certificate of incorporation or DBA (doing business as trade-name) registration.
• list of personal bank accounts and credit references.
• list of company bank accounts and credit references (if any).
If you are applying for a new business loan for a business you have been operating, they will also want to see:
• complete set of company financial statements for past years (bring the last three years if you have them).
• current year to date financial statements.
• any financial statements should also include a copy of your accounts payables and receivables.
The Loan Application Process for a Commercial Business Loan
Expect that most loan officers will want to get to know you and more about your business before getting down to details.
They will most likely ask you about your business, what the money will be used for and if they do not know anything about your business will ask if this is a new business or an established, on-going entity.
Getting into the Details
Depending on your loan officers level of experience he/she may begin to go through the business plan with you sitting right there. Be prepared to answer questions and perhaps make clarifications.
The Executive Summary of your business plan should include how much money your are looking for, projected revenues, profits and the type of loan you are looking for.
If the loan officer is inexperienced or new to business loans she may ask for some time to look over the business plan. This is not unusual. I might ask some questions about how long it would be until you could meet again and ask her to clarify the loan decision process and the parties involved.
Be patient and work with the bank as a good relationship is very important and it is important to get off on the right foot. If you need a quick decision tell them that upfront and your reasons. Just because you are anxious and want to know right away is not a good enough reason. Because if you push too hard they will be wondering why you need to move so quickly and what might be missing or what you may not have disclosed.
Patience is a virtue, feel free to ask good questions, keep it professional.