Bank business loans offer low interest rates and flexible terms and are attractive for small businesses looking for low-cost business loans. However, banks need extensive documentation to apply for a loan, as they want to ensure they have strong ability to pay off their loans.
You may need to provide personal and business bank statements, tax returns, credit history and more to demonstrate your creditworthiness. Despite the processes involved, the terms and fees of the bank are worth the effort, especially if you have a well-established business with good or good credit.
Get familiar with the lender’s business loan requirements and the documentation needed to ensure application delays.
Business Loan Documents About You
The lender will request personal information to see how you manage your personal finances. Your personal financial management will show your lender how well you manage your business loans. Information and documents required for a business loan:
- Personal ID to confirm your name, personal address, date of birth and social security number
- Bank Statement
- Personal tax return (may be necessary or not, but it is useful for having it on hand)
- Your resume to show your experience in your industry
Business Loan Documents for Your Business
As a rule of thumb, traditional bank lenders may require more business loan documents than competing online lenders. Business documentation required for bank business loans:
Establishment and legal documents
- Established article
- Management contract (if your business is an LLC)
- Your business name and registration information
- Ownership structure
- If this applies, the franchise information
- Permit licenses and/or documents if applicable
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A business plan to show you how you plan how to make your business profitable
Business finance
Other documents required for bank Business loan
These additional documents may be required when applying for a business loan from a bank.
- Asset Information: If you use a secure loan, you will also need to provide collateral information about the assets you are using to protect the loan. These assets may include equipment, technology, vehicles, real estate, and bank accounts. You may need to include an assessment to prove the value of the asset.
- Uniform Commercial Code (UCC) Lien: Some lenders, in the case of default, must file a UCC lien to formalize their rights to collateral. The lender is not responsible for creating this as it must be generated as part of the loan closing document.
SBA loan documents from the bank
For certain SBA loans, additional business loan documents or forms must be applied. You can apply for these loans through traditional banks, but they provide funding differently than traditional business loans. To apply, you need to:
- Overview of business history and its challenges
- Information on how SBA loans can help your business
- If this applies, business lease information
- SBA Forms: You may need to include SBA-specific forms, such as Form 413 or Form 1919.
- Business Learning: 7(a) If you plan to purchase another business using a loan or another type of SBA loan, you must include additional documentation regarding that business, its assets, and its history.
Conclusion
Banks are known for asking for more documents when applying for business loans than other lenders. This document is important as it demonstrates lenders their financial track record and their ability to repay loans. Before submitting your application, you can ask your lender for a thorough list of the documents you need. Holding as much information as possible in your hands will help you run your application process smoothly.
