There are two very different answers to the question “what do you need to apply for a small business loan?” And that’s because there are two very different types of firms that offer them: banks on one end of the spectrum, and alternative lending firms like National Business Capital on the other.
What You Need to Apply for a Small Business Loan from Banks:
To apply for a small business loan from a bank, you’ll need to submit a package that includes at least the following:
- A comprehensive business plan detailing your marketplace, competitive advantages, core value proposition, product/service offerings, risk management strategy, staffing plan, financial forecasts, and so on.
- Personal and business credit scores (both scores must be exceptional and in the prime borrowing category).
- Investment information detailing how much the founder/principals, and any other party, has put into the business.
- Financial statements for at least the last two years showing that the business is profitable and cash flow positive (some banks require that these statements must be independently reviewed and/or audited).
- Business and personal tax returns for the last two years.
- Complete details on all accounts payables and accounts receivables.
- Resumes and backgrounds for all principals, members of the executive and management team, and any other key personnel (e.g. specialists, etc.).
- Proof of adequate insurance coverage (some banks further demand that founders/principals take out additional life insurance that pays out to the bank first in the event of death).
- A list of adequate collateral, which may include personal and business assets, to secure the loan in the event of a default.
- A full inventory of all relevant legal documents, which may include: articles of incorporation, franchise agreements, business licenses and registrations, contracts with any third parties (e.g. vendors, suppliers, strategic partners, etc.), and so on.
Note that this is not a comprehensive list, because there is no prescribed law or regulation that dictates what banks can demand. Provided that they are not being discriminatory, they are free to modify their requirements on a case-by-case basis. For example, some banks balk at approval if the founder/principals have not invested any of their own money in the business.
What You Need to Apply for a Small Business Loan from National Business Capital:
- Your legal business name and basic information (e.g. industry, address, phone, email, etc.).
- Your total monthly sales.
- The amount that you want to borrow and your intended use of the funds (e.g. business debt, inventory, equipment, etc.).
And that’s it! What’s more, you don’t even have to prepare documentation. All of the above information can be submitted to us through our secure online application form. From beginning to end, the process takes about 2 minutes, and can be done at anytime, any day of the week.
Once we receive your application, within 24 hours (or the next business day if we receive your application on a Friday) one of our funding specialists will contact you to learn more about your needs and goals, and explain how we can help you meet them.
It really is this easy to apply for a small business loan with us. We can’t speak for banks and their practices, but as far as we’re concerned — and our satisfied clients around the country would agree — keeping things simple and straightforward is how business should be done!
If you’re interested in applying for a loan, our 2-minute application can save you time in getting the funding your business needs. With no upfront fees and approval within 24 hours, what are you waiting for?
Also, be sure to check out our FREE eBook on how to get business funding when banks say no: