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Which Documents Does Your Small Business Need to Secure a Loan?

September 27, 2018 / by John Gleason

business documents on office table with laptop computer and graph financial diagram and man working in the background-1Do you have a new business that shows promise or an established business that's having a growth spurt? Either way, at some point you'll probably wonder whether an infusion of cash could help you reach that highly desirable (though difficult to define) "next level."

Getting Your Priorities in Order
As a first step, make sure your records are organized and up-to-date. A number of bookkeeping issues, from misclassified expenses to improperly applied COGS, can jeopardize your loan application.

The key reports and documents you’ll typically need to provide are:

  • Current P&L: This represents your revenue minus your operating expenses for a given period of time. If it's a negative number, then a loan won't fix your problems.
  • A balance sheet: I covered this one in an earlier post. Basically, the balance sheet is a snapshot of your company's liability, assets and capital on a specific date.
  • Tax returns: Just as a lender would want to verify your income before approving a car loan, a bank wants to see proof of your company's financial health before granting a business loan. The lending institution might request up to three years' worth of tax returns to reach their comfort level.
  • A business plan: If you were able to start your business with your own funding, you may have skipped the step of creating a business plan. It’s always a good idea to write a business plan, and most lending institutions require one. As part of the business plan, you may need to include an exit strategy. Start with an outline on one page and go from there.
An outsourced bookkeeping services company can help you get your books in order and prepare the necessary documents you need to apply for funding, so you can focus on taking your business to the next level.

Topics: Small Business Advice, Metrowest, MA, North Shore, Bookkeeping Services, Tips for Startups, Business Advice, Central MA

John Gleason

Written by John Gleason