business loans document checklist

The Ultimate Business Loan Documents Checklist

Getting a business loan is rife with rejection. Are you tired of hearing NO to fund for your big idea? Then use this to prep for a loan application. Here is the ultimate business loan documents checklist for different types of business loans and financing available.

In this article:

  • Business loan documents checklist: what do I need to get a business loan? 
  • Different types of business loans

The Business Loan Documents Checklist

Being organized will get you on the bankroll. When you have all the right documents in one place it will be easy access when a lender makes a request. You may be asking:

What documents do I need for a business loan? 

Here is our business loan documents checklist. It is all the paperwork to prepare for the business loan application process.

An accountant doing accrual accounting for a business loan application process

Accrual Accounting System

This isn’t a standard for all creditors, but it helps immensely! Using accrual accounting for your business means you are recording transactions with a double-entry method. This is the preferred method from a bank because it provides more accurate reporting on financial statements and taxes. If your business utilizes cash-basis accounting, your financial statements will probably need to be converted to accrual-basis. 

Proof Of Business Registration

You will need to have proof of business formation. Whatever your business structure, you should have official documents stating the inception of your company. Thus your business loan application needs to include a business registration in your resident state. Don’t Forget! If you are in business with others you need to include accompanying partner agreements, articles of organization, or corporation bylaws. 

Pro Tip: For good measure, throw in recorded member minutes, discussions, or votes on the topic of the business loan application. 

Business Licenses And Permits

Any applicable licenses or permits specific to your industry, need to be included in your loan application. For Example: seller’s permit, sales tax license, medical license, etc.  

Not only does this certify that you are the owner of the business but that you able to conduct business legally. It shows you are compliant with local, state, and federal regulating agencies. This should go without saying, but all business licenses and permits should be current.

Employer Identification Number (EIN)

An EIN is a number issued by the IRS to identify your business for tax purposes. It is essential for certain tasks like: filing federal and state taxes, getting a loan, employing workers, applying for a sales tax permit, getting products through customs, and opening certain merchant accounts. An EIN verifies that your business is in compliance with the IRS and will be used for the lender’s tax reporting. 

Credit History

Poor credit history will result in a denied business loan application. Personal and business credit history will be scrutinized as the lender assesses your risk. For the business, you build credit just as you would on a personal level. A lender wants to see a good credit score, your length of credit history, a record of paying your bills, paying on time, and not exceeding spending limits. Having a high debt to credit ratio—owing more than you are making—isn’t going to be appealing, especially to a bank.

Business Account Bank Statements

A separate bank account for business activity adds a level of professionalism to your accounting. A creditor will be able to glean that your business is a legal entity, actively making money, and accurately reconciling bank statements. Each bank deposit is a measurement of cash liquidity at any given point in time, and savings account collateral if needed.

Previous Year Tax Returns

At the very least, you will present one year’s business tax return. Depending on your business entity, it will be a company tax return, or informational return of pass-through taxes and your individual tax return. Lenders are looking for reporting consistency of business income and expenses. If they ask for more than one year, they are interested in how much your business made and if it is sustained year to year. 

Financial Statements, Reports, and Forecasts

Financial statements are critical for approval because they show the inner workings of your company. Typically you will be responsible for monthly or quarterly financial statements going back 2-3 years; projections or forecasts will need to be done 1-2 years forward. 

Pro Tip: Accrual-basis accounting and performing a month end closing, makes financial statements easy to produce for a business loan application.

Here are the different types of financial documents that you could be asked to present in an application:

Balance Sheet 

A balance sheet will show whether your assets are covering your liabilities. They will pay close attention to your current assets and current liabilities to understand your debt ratio. Your debt ratio is your liabilities divided by your assets expressed in a percentage. The higher the percentage the less wiggle room you have to take on debt.

The balance sheet also shows how liquid your assets are, and where they are tied up. Certain lenders will value your asset accounts as collateral. In liabilities, they will be looking for other loan balances which could affect your loan terms. 

Statement of Cash Flows 

This is important when considering your company’s past cash flow. As well as your management of cash flow—have you experienced cash crunch periods? Has cash flow been conducive to business operations? Lenders want to see when cash is coming and going from your business. 

Income Statement 

The income statement provides the picture of business profitability over time. It will show revenue and expenses, and whether you have sustained a gain or loss. Ultimately they want to see that your company is progressing and has steady streams of revenue.

financial statements for a business loan app

Aging Reports 

Your accounts receivable and payable are where the action happens. An aging report for accounts receivable will show the amount of money coming in and outstanding client dues. For a loan application, there will be close attention to your AR balance, how long your invoices are dated, and overdue invoices. 

If you are asked to produce an aging accounts payable report, think of it as a courtesy check on business credit. This report will provide insight into bill pay and whether your vendor accounts are in good standing. Are you paying your bills on time and in full? How many bills are you stacking up?   

Projected Balance Sheets 

A projected balance sheet shows changes in your assets and liabilities. It will be based on your current balance sheet and will analyze a loan’s effect to your finances. It will show projections of loan down payment, other debts like fees and interest, and the use of loan funds for business. The main motive of this financial statement is to showcase your ability to manage your future liabilities.  

Cash Flow Forecast 

A cash flow forecast will show that you will stay solvent with financing. It will serve as a path to your projected revenue and expenses goals, showing that you can handle cash inflows and outflows. In addition to how the financing will impact operations, your cash flow forecast should include any loan prepayments and upfront costs. 

Projected Profit and Loss Statement 

This is needed to show your projected profit/loss. You want to display future revenue with financing, in your P&L projection. Don’t inflate numbers! It is better to show a true income prediction. Include all anticipated expenses because it is reporting evidence as to why you are expecting to perform a certain way. A lender will revisit your projection to monitor progress.

Loan Repayments

It is okay for a business to have multiple loans out. As long as you are well above water, it shouldn’t exclude you from being approved. It could work to your advantage to have a good history of credit. Lenders will want to see the terms of the loans, interest, and payment history. 

Collateral for a business loan application process

Proof Of Collateral

Collateral is what you wager to the creditor for the loan. It takes on the form of a savings account balance, tangible property or real estate deeds. Collateral helps to reduce the risk associated with you as a borrower. Only some alternative lenders require this security, banks and traditional creditors will not approve your application if your business poses too much risk to their institution.

Down Payment

For large loans, some banks will ask for a down payment. It is typical to see anywhere from 10-30% down for a loan. Just like buying a house, the more you put down, the lower your interest rate and premium will be. Loans are contingent on down payments, so they will need to be paid upfront

Business Plan

A business plan is your opportunity to exhibit the spark of a company. Sell you, and sell your initiative, be a high-value CEO that instills faith in the lender and is the start of a symbiotic relationship. Ultimately you are the person they are giving money to, and what your business does with the funding could be what gets you approved. 

Detail your industry by answering these questions: 

What are you selling?

What sets you apart? 

How do you run operations?

How do you make sales or acquire customers? 

How will the loan pave a path towards expansion?

Give them the keys to your continued success.

Different Types Of Business Loans

Getting a business loan begs the question—what type of business loan should I get? There are many different types of business loans, and understanding what is available to you could save you a lot of money in interest. 

Here are 11 different types of business loans:

1. Business Line Of Credit

Have you gotten a call from a creditor offering your business a large sum of money? This is a line of credit and is the simplest way to get money as an existing business. A business line of credit is a flexible way to fund company activities. Terms are like a credit card where you have a limit, and you make payments based on how much you borrow.  

You can get anywhere from $100-$250K to meet your short-term or long-term needs. However, interest rates can be high because they depend on your credit score, length of time in business, and how much you are borrowing. A business line of credit usually requires a business credit score of 500 or higher

2. Small Business Administration (SBA) Loan

An SBA loan is a government-backed business loan. The U.S. Small Business Administration guarantees repayment of a certain percentage of the loan, so the risk is reduced for lenders. Think of them like the friend that vouches for you at a job. The SBA opens the door to a wider pool of lenders, so small businesses find critical funding. 

The application process is lengthy and you need to meet certain requirements. The wait is well worth it because you get far more favorable loan terms.

Here are the most popular types of SBA loans: 


This type of loan is multi-purpose, with low to high amounts. The maximum loan amount is $15 million with interest rates as low as 5.5%. They have capped interest rates and limited fees all dependent on how much you are applying for. These are a great solution for real estate inclusions in the loan, but it is not a requirement. 

504 Loan

These loans are geared to funding projects like buying land, a new building, or new equipment. Interest rates are as low as 2.85%, but they are reserved for high net worth businesses (above $15 million) with a net income above $5 million, for two years before applying. 


Honestly, these are the best small business loans for startups. This program groups all SBA partner-lenders that don’t require previous business history, to facilitate an easier business loan application process for startups. These feature smaller credit limits, under $50K, with interest rates as low as 8%.

SBA Express Program

The SBA version of getting a quick business loan. They promise to respond within 36 hours upon receiving an application, still the reviewal period takes around a month. The maximum loan amount is $350,000 and the SBA only guarantees 50%.

3. Short-Term Business Loan

In a bind? This is your loan for extenuating circumstances in business. You can get them quickly, but they need to be paid back just as quickly. That is due to exorbitant interest rates and short loan terms of 1-3 years. 

Short-term business loans free up spending for inventory purchases, payroll, or off-season working capital. These loans are optimal for businesses with an acute sense of profitability. If you know that within months you can pay back the premium, then you should have no issues taking on this type of financing.

4. Business Term Loan

It is a quick process loan but less stressful to pay off than a short-term loan. Business owners will utilize this type of loan for one-off investments like real estate, expansions, debt refinance.  The term length can be anywhere from 1-5 years and interest rates are as low as 3%, depending on the lender. What is nice about term loans is that they have fixed payment schedules to easily maintain good standing. 

5. Startup Loan

Startup loans are meant for new businesses that seek freedom in funding. Investors can be demanding in the first few years, a loan relieves that stress. Specific startup lenders will provide up to $750,000 without extensive business history. Interest rates vary wildly from 0-17%, and loan terms will likely be subject to collateral. For the risk factor, not all banks and lenders will offer startup loans so it takes some searching to find the right opportunity.

6. Business Acquisition Loan

A business acquisition loan has a very specific purpose. You apply for this type of loan when you want to acquire an existing business or franchise. Additionally, it can be used to buy out a partner in business, or a larger share of a company. These loans are offered to people on strict terms. Not only does the lender want to see your personal and business credit history, but they also want the full financial scoop on the company you set out to buy. 

What is so appealing is that these loans have low rates for longer terms. Unlike other loans, this option facilitates expansion under favorable conditions for an owner. Depending on your financial situation, and the loan package you are applying for, you may need to offer collateral or a down payment.  

7. Equipment Financing

Equipment financing is used exclusively for, well, equipment. You can use this for different types of equipment per industry. For Example: as a subscription to a merchant company, new cloud software, an accounting plan, or traditional machinery. 

The equipment you are financing serves as collateral for the loan, and terms should be spread out for the lifetime of the piece of equipment you will be using. Interest can be anywhere from 8-30% depending on your credit history. 

8. Commercial Mortgage

Much like a home mortgage, this is explicitly for commercial real estate. You can use this to fund new construction (retail space, office, restaurant, warehouse) or an update to an existing structure. This is an asset-based loan so the amount of the loan and the interest are based on the commercial space. Interest rates are low with longer terms. Due to the specificity of the loan, it is easier to balance business and repayment, than a quick sum that offers you shorter terms at higher interest rates.

9. Accounts Receivable Financing

Merchants can receive a loan for any overdue client invoices. You are selling the invoices to creditors and getting a percentage of the invoice upfront. The lender acts as a collection agency so you can get up to 80% of accounts receivable value. Since this is NOT an asset-based loan, it is NOT reported balance sheet.

Accounts receivable financing is a great solution for those that need flexibility with financing. It also gives an owner the freedom to run the business, without offering it in its entirety as collateral. It provides money for those that don’t want to apply for a loan or already have an outstanding loan. Be sure to search for the best interest rates, because they are dependent upon invoices. Plus some lenders require payment of any uncollected invoices.

10. Merchant Cash Advance

This is another option of business financing instead of getting a loan. With a merchant cash advance, you are borrowing against your future sales. This type of credit is like going into business with a new investor who gets a percentage of your profits. Only the investor is a creditor imposing fees, interest, and skimming your future earnings.

CAUTION! Merchant cash advances come with high fees. Interest rates run on a sliding scale of how well your credit card sales are. Usually, they need to be paid off in full within a year. They can be hard to pay for businesses that don’t have credit card sales volume or a good understanding of future performance. However, they are an option for those with poor credit and financial history because applications usually just require bank statements.

11. Business Credit Card

If you need money and you are having issues getting a loan, perhaps a business credit card is in the future. A business credit card offers some flexibility on what can be purchased as it can be used for anything that a credit card can buy. You need good business credit to get the best interest rates. A credit card will also help you build a credit history if you are just starting out.

characters getting a business loan from the bank atm's

Last Tick On The Business Loan Documents Checklist

This business loan documents checklist will prepare your business for loan approval. What we recommend during the application process: act swiftly; present with transparency.  Have a notary on standby for when you are approved and as with anything money-related, spend wisely. Accounting for loan repayments accurately will keep you in the green, help you build a credit history, and grow your business. After all, that is the point of injecting your business with economic fuel. 

Enjoying reading this article?

Here's some more articles in this category

Need Accounting Help?