THE ABC's OF GETTING A SMALL BUSINESS LOAN

Predicting the future is obviously risky. But given the current volatility and uncertainty of the marketplace, it would be very safe to predict that financial institutions will be extremely thorough in reviewing your small business loan application.

Most financial institutions require three consecutive year-end tax returns, financial statements and interim reports. Occasionally, exceptions will be made for younger companies if they have a fair share of unencumbered assets and a quantifiable market.

You will also need the following documents:
1. balance sheet
2. profit and loss statement
3. accounts receivable and payable aging
4. debt schedule
5. management's discussion or analysis of operations
6. projections for the coming 12 months personal and business tax returns

Unused and available bank credit lines or other credit facilities are also factors in the loan approval process. They reveal whether there is a sufficient reserve to buffer minor cash flow problems. For example, a lender will question whether those resources are sufficient to address a seasonal need for extra funds.

Source: https://www.smallbizlending.com