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The type of lender and the type of funding you’re applying for impacts the loan documentation required.
Applying for a loan can be an overwhelming experience that requires lots of documentation about you and your business.The type of lender and the type of funding you’re applying for impacts the loan documentation required—traditional lenders like the Small Business Administration (SBA) and banks have strict and thorough documentation requirements, while alternative lenders typically ask for less paperwork and have a more streamlined process.
In this loan documentation checklist, we’ll outline what you’ll need to apply for a small business loan from any type of lender, including the SBA, banks, and alternative lenders.
Loan documentation requirements for SBA 7(a) Loans
SBA loans have the most comprehensive loan documentation requirements. This is what you’ll need to apply for an SBA 7(a) loan:
1. Borrower information form (SBA Form 1919)
This form profiles the loan applicant(s). It includes contact information, identifying company qualities, loan intent, business principles, and an overview of previous or outstanding loans.
This form is required for: Everyone who owns 20% or more of your business, all officers and directors, managing members, day-to-day operations managers, and anyone guaranteeing the loan.
2. Personal background and financial statement (SBA Form 912 and SBA Form 413)
These forms—which include a list of assets and liabilities—confirm your personal credit is strong and give your lender an idea of your net worth and investment history.
These forms are required for: All partial owners, general partners, proprietors, and managing members of your business.
3. Business financial statements
Required business financial statements include:
4. Ownership and affiliations
Including a list of names and addresses of any subsidiaries and affiliates, concerns in which you have a controlling interest, and concerns that may be affiliated by stock ownership, franchises, proposed merger, or otherwise.
5. Business certificate or license
You’ll need to supply the original business license or certificate of doing business. If you are a corporation, stamp your corporate seal on the SBA Borrower Information Form (SBA Form 1919).
6. Loan application history
Include records of any previous loan applications.
7. Income tax returns
Include signed personal and business federal income tax returns for the last three years.
Include personal resumes tailored to the loan application process for each principal.
9. Business overview and history
Supply a brief history of your business, an explanation of why you’re seeking an SBA loan, and how it will help your business.
10. Business lease
If your business has a brick-and-mortar location, include a copy of your lease or a letter from your landlord outlining the lease terms.
If you are purchasing an existing business, include:
Lenders have grown more conscious of loan security during the COVID-19 pandemic. As a result, you may have to provide a plan for how you’ll cope with the effects of the pandemic and answer questions like “what if this business needs to operate at 50% capacity?”
Loan documentation requirements for bank loans
Banks, credit unions, and other traditional lenders also have lengthy paperwork requirements. When applying for funding from a bank, it’s prudent to prepare the same documentation needed for an SBA loan.
Loan documentation requirements for alternative lenders
Alternative lenders have streamlined online application forms that require less extensive paperwork. Applying for funding from these lenders typically begins with a form that collects information including:
Applying for a small business loan is a time consuming and challenging undertaking—the lender always seems to need just one more document. That’s why having all of your documents ready before you apply for funding often speeds up the approval process and helps decrease stress.
Andrea Carmine is the Content and Social Media Manager at Greenbox Capital®. With over 5 years of experience in digital marketing, social media management, content, and social media strategy, Andrea is an expert at developing and executing the company's online marketing initiatives including website content, blog posts, social media content, and email campaigns. Andrea is a graduate of Florida International University with a BA in Communication and Media Studies.