There was a time when financing a startup business or keeping a company afloat requires pulling money out of your very own pocket. When business loans came into the scene, the selections were still few in number. However, as time went on by, the number of options to acquire financial assistance for businesses grew.
Now that we’re living in the 21st century, the number of ways to get a loan is increasing by the day. But always remember that there’s still a right way to submit a loan application, because if you don’t, then you’re going to walk out of the bank or financial institution with nothing else but the same amount of cash you’ve had when you walked into the premises. Be like a scout and always come prepared when you submit a business loan application. Here are the 3 most popular business loan requirements many banks and financial organizations require.
To heighten your chances of getting your business loan approved, most lenders tend to look closely at your capabilities of holding cash. In other words, they’re going to keep a close check on your current assets as an individual or as a business. After all, they need to check if you or your company can afford to pay the loan back (plus interests), and in a timely manner. It’s in this regard that bank statements are required by many financial and lending firms. Also, bank statements will give lenders a brief look at how well you can manage cash that might be coming to your company soon.
A Balance Sheet
If you’re a business owner, an entrepreneur, or an employee that’s assigned to apply for the loan, then know that most banks and financial firms will require a balance sheet. This requirement is akin to a snapshot of your current business’ financial health. The document (or documents) will show lenders on what you currently have and what you currently owe. Like bank statements, a balance sheet will let the financial institution understand how well your business can manage assets and liabilities.
Profit and Loss Statements
P&Ls, revenue statements, income statements – these are some of the many names that profit and loss statements hold. No matter what you may call it, these documents will essentially give the lender the big picture regarding your current business’ net income. Income statements will prove where your money is coming from, as well as where it’s headed.
Other popular business loan necessities include the following: business and personal tax returns, time in business, personal credit score, a letter of intent, and the main purpose of the loan application.