Business Loan Documents Checklist: What Banks Ask For

For most business loans, a bank asks for three years of business tax returns and financial statements, a current year-to-date statement, a debt schedule, receivable and payable agings, and personal financial statements and tax returns for every owner of 20% or more. Have these ready before you apply and you can cut weeks off the process.

Below is the standard checklist I would hand a borrower. Your bank may ask for more, but this covers most commercial loans.

The business documents

1. Business tax returns, last 3 years. All pages and schedules.
2. Year-end financial statements, last 3 years. Income statement and balance sheet. Larger loans may need statements prepared by a CPA.
3. Interim financial statements. Year-to-date income statement and balance sheet, no older than 60 to 90 days.
4. Debt schedule. Every loan and lease, with lender, balance, payment, rate, maturity, and collateral.
5. Accounts receivable aging. Who owes you, and how long they've owed it.
6. Accounts payable aging. Who you owe, and how long you've owed them.
7. Business formation papers. Articles, operating agreement or bylaws, and a list of owners with percentages.

The personal documents (each owner of 20% or more)

1. Personal financial statement. What you own and what you owe. Your bank will give you its form.
2. Personal tax returns, last 3 years.
3. A copy of your ID, and permission to pull your credit.

For specific kinds of loans

• Real estate: purchase contract, rent roll or leases, and property tax and insurance details.
• Equipment: a quote or invoice from the seller.
• Buying a business: the purchase agreement and the seller's last 3 years of financial statements and tax returns.
• SBA loans: SBA forms your lender provides, plus a short business plan and projections for newer businesses.

Three things that slow approvals down

• Tax returns and financial statements that don't match. If they tell different stories, the bank will stop and ask why.
• An old interim statement. A statement from five months ago means the bank has to ask again.
• Missing pages and schedules. Send the complete return, not just the first two pages.

Before you send anything, run your numbers through the DSCR calculator. It's the first ratio the bank will figure. Chapter 8 walks through what happens after you submit, from underwriting to term sheet to closing.

Common questions

What documents do I need for a business loan?

Most banks ask for 3 years of business tax returns and financial statements, a current interim statement no older than 60 to 90 days, a schedule of business debt, accounts receivable and payable agings, and personal financial statements and tax returns for every owner of 20% or more.

How many years of tax returns do you need for a business loan?

Usually three years of business tax returns and three years of personal returns for each 20% or larger owner. Some smaller loans ask for two.

What is a debt schedule?

A debt schedule is a one-page list of every loan and lease the business has: who the lender is, the original amount, the current balance, the monthly payment, the rate, the maturity date, and the collateral.

What is an interim financial statement?

An interim statement is a year-to-date income statement and balance sheet for the current year. Banks want it recent, usually no older than 60 to 90 days, so they can see how this year is going.