Applying for a Loan? Here are 7 Documents You'll Need
Applying for a loan can feel like a daunting task. There’s a lot of paperwork involved, and it can be easy to get overwhelmed. But don’t worry! We’re here to help. In this blog post, we’ll review the basic loan documents you need before applying for a loan. Keep in mind that these documents may vary depending on the financial institution and type of loan. Let’s get started!
1) Entity Documents
You’ll need to provide proof that your business’s registration is in good standing and who is authorized to act on behalf of the business. You may be asked to provide your Business License, Articles of Incorporation, LLC Agreement, etc., unless you already have an established bank account with that financial institution.
2) Tax Returns
Your business income tax returns show the lender your income and expenses, which is a crucial part of the application process. Be prepared to provide up to three years’ worth of returns, and you may also be asked to provide your personal tax returns.
3) Financial Statements
Your financial statements will ensure the lender has an understanding of how your business works. Typically, you would be asked to provide your business’s balance sheet, profit & loss statement, and accounts receivables. You should also be prepared to provide your personal financial statements as well.
4 )Debt Schedule
Your financial institution may want to look at your current debts, business or personal, to see your repayment history and ensure that you would be a responsible borrower.
5) Business Plan
You may be asked to provide your current business plan or a business resume. This would include the history of your business and any current and future goals. If COVID-19 impacted your business, you would include those comments here.
Before you can get a loan, your financial institution will need to confirm that you have the right insurance coverage for your business. The insurance requirements vary depending on the type of loan you’re applying for and your business type. Requirements can include hazard insurance, property insurance, workers’ compensation, and so on. You may be asked to provide proof of insurance and/or your insurance contact information.
7) Account Information
If approved, the lender would need your bank account number and routing number to fund the loan. However, the financial institution you’re applying for a loan through will likely ask you to switch banks and have your banking relationship be with them. If you’re applying for a loan through Coastal and want to change your banking accounts to us, you can read this blog to see what we require: What You Need to Open a Business Bank Account
We want to make applying for a loan as smooth as possible for you, and having these documents ready is a great starting point. Every loan and business is different, so you may be asked to provide more than what is listed above. At Coastal, we provide a personalized experience when applying for a loan. If you’d like to experience the Coastal Difference, contact us today!