Basic Small Business Loan Requirements

There are many small business loan requirements that must be completed in order to find financing. Once you decide that you want to start a business or fund an existing operation, you need to make sure that you are going to have enough money to meet all your goals. For many, this means applying for a small business loan. With so many requirements, it is essential that you are organized from start to finish. Even though small business loan requirements can be flexible, this does not mean that you are guaranteed to receive any money. It is the way that you approach the loan process, as well as your current financial situation, that will determine whether or not you qualify. In order for your application to be reviewed, you will need to include the following documentation:

Business Profile and Mission Statement

This is your chance to describe your business, your annual sales, employee statistics and anything else that will highlight the positive aspects of your company. You will also need to include a mission statement that describes your company. Within your profile, be sure to outline some of the reasons why your business model is different than your competitors.

How will you use the Funds?

It is required that you include information on how you are going to use the funds. If you are looking for a small business loan just because you want more money, expect to be denied. It is essential that you clearly outline how the money will be used. In addition to how the money will be used, include the type of loan that you are looking for and the amount you are interested in.

Financial Statements

If you are not in the startup phase of your business, you should have financial statements for past years. By providing these to the lender you can show your stability, as well as your ability to make payments on time. If you are a new company, you will have to provide a basis for income and financing.

While business financial statements are very important, owners will need to include personal information as well. The overall strength of this statement will be the final determining factor on whether or not you receive financing. Make sure you include all the information that is being asked of you.

Cash Flow and Future Projections

Cash flow projections answer the two basic questions:

  • How much money are you earning right now?
  • What type of cash flow are you expecting in the future?

This information is important because the lender wants to see that you will be generating enough money to pay back the loans under the agreed upon terms.

These basic small business loan requirements should help you understand what goes into the application process. As a business owner you should expect a potential lender to collect a lot of information. These basic small business loan requirements are the same for all companies, no matter what type of company it is.

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