{"id":4496,"date":"2016-02-09T22:04:29","date_gmt":"2016-02-09T22:04:29","guid":{"rendered":"https:\/\/www.arffinancial.com\/development\/?p=4496"},"modified":"2023-11-06T17:15:20","modified_gmt":"2023-11-06T22:15:20","slug":"documents-needed-for-business-loan","status":"publish","type":"post","link":"https:\/\/www.arffinancial.com\/development\/documents-needed-for-business-loan\/","title":{"rendered":"Bank Loan Application Process: Documentation Overload?"},"content":{"rendered":"

When your business needs money to cover large purchases and\/or expansion costs, a traditional\u00a0bank loan is normally an owners first choice.<\/p>\n

Banks can typically provide the necessary funds at the lowest rates. This may be the best option for your business if your circumstances are ideal, however ARF Financial offers business financing backed by its several Community Bank\u00a0partners giving you\u00a0the features you want without the hassle\u00a0and paperwork overload you don’t!<\/p>\n

When applying at your local bank, you can make the rather cumbersome application process smoother by already having\u00a0these documents gathered and accessible\u00a0when discussing your needs with a bank loan officer.<\/p>\n

\"business<\/a><\/p>\n

1. Business Plan<\/h2>\n

A solid business plan shows the bank what your company is all about, how well it\u2019s operating and why you\u2019re applying for a loan. It should include an executive summary, a market analysis, a detailed business description, the qualifications of the team you employ and information on your marketing strategies.<\/p>\n

2. Credit Reports<\/h2>\n

The bank wants to know that you and your business have a solid credit history. This demonstrates that you know how to handle debt without borrowing or spending too much, and that you routinely make payments on time.<\/p>\n

Minimum credit scores vary, and if you can\u2019t prove that you\u2019ll be consistent paying back a loan, the bank will be much less inclined to extend funds to you.<\/p>\n

3. Financial Statements<\/h2>\n

Financial projections are often included in a business plan, but some banks require\u00a0them to indicate\u00a0your business’s future performance.<\/p>\n

You must be able to provide profit and loss statements, cash flow, a balance sheet and important financial projections based on past performance. The bank could request monthly, quarterly or yearly statements depending on how long you\u2019ve been in operation. Most banks have a minimum threshold for time in business. It varies from bank to bank but 1 to\u00a03\u00a0years is typical depending on your business type\u00a0but could go up if you need a larger sum of money.<\/p>\n

4. Bank Statements<\/h2>\n

Personal and business bank statements serve as proof that your financial situation is what your business plan and financial paperwork says it is. Banks usually require one year\u2019s worth of these statements when you apply for a loan.<\/p>\n

5. Income Tax Returns<\/h2>\n

It’s always prudent\u00a0to hold onto\u00a0your yearly tax information in case you need them to apply for a bank loan. Banks like to see tax statements over a period of several years. Providing your personal and business returns help verify your income, overhead and to support the validity of other financial documents involved in your loan application.<\/p>\n

7.\u00a0Legal Documents<\/h2>\n

While the bank isn\u2019t likely to doubt the legality of your business, you still need to prove that your operation is legitimate. Be prepared to show your license and registration, articles of incorporation, any contracts with suppliers, property leases and franchising information, if applicable.<\/p>\n

If all of the paperwork is in order and the bank determines that your business is eligible for a loan, the application should go through. Once approved, you can use the money to cover the expenses detailed to the bank in your documentation. If you have all the required paperwork and credit history, the entire process can still take a couple of weeks. However, if you’re missing documents, or have less than stellar credit, the approval timeline can increase dramatically \u2013 even months \u2013 worst case, be prepared for a decline letter.<\/p>\n

Sound Overwhelming?
\nThere\u00a0is\u00a0an Easier Option.<\/h2>\n

\"Retail<\/a>
\nIf you don’t have time or the ability to gather up all of these documents and wait for the bank to review and approve your business loan application, you might consider taking out a Working Capital Loan<\/a> or Business Line of Credit <\/a>with an alternative lender like ARF Financial.<\/p>\n

When you obtain business financing through ARF Financial you don’t have to sacrifice the bank features you’re looking for like:<\/p>\n