Anyone that has ever applied for a business loan or line knows it can be a long and cumbersome process. The key to shortening the process and smoothing it out, really goes to how you start the process. A complete and concise financial package will go a long way. Much of the back and forth between borrower and lender, that slows the process down, is related to needing additional information, specific documents not being completed and the bank not wavering on anything, because they need to meet all their regulatory standards. When pulling a financial package together there are some standard items that are nearly always asked for. Here are a few of those items:
- Personal tax returns
- Business tax returns
- Personal financial statement
- Aging AR/AP’S
- YTD Balance Sheet and Income statements
- Business Debt Schedule
Depending on your request, whether it be a loan, line, real estate or business acquisition there will be some documents specific to that request. Disclosing potential issues also assists in keeping the process moving ahead. Bankruptcy, other ownership interests, certain financial transactions can cause additional questions and also bring into doubt the potential borrower’s character as well, if not disclosed early on.
The most effective way to start the application process is to ensure you have a complete package, have all the documents completed fully and disclose anything that might be questioned during underwriting and respond quickly to bank inquires.
If you are starting this process or new to it, reach out for a conversation. With 15 years in banking, I am familiar with the banks, how they operate and can assist in the process.