Don’t Forget Your Financial Statements When Applying for a Business Loan

Estimated read time 3 min read

Many entrepreneurs apply for a business loan, only for the lender to reject their application. Statistics, in fact, show that the approval rate for business loans offered by big banks is just 15%. Alternative lenders have a higher approval rate of 27%. Regardless, not all business loan applications are approved. If you’re planning to apply for a business loan, you’ll need to bring the right financial statements. With all of the necessary financial statements, you’ll have an easier time getting approved for a business loan.

Don’t Forget Your Financial Statements When Applying for a Business Loan

Balance Sheet

You should bring your business’s balance sheet when applying for a business loan. It’s arguably one of the most important financial statements for businesses. A balance sheet is a ledger that breaks down all of your business’s assets, liabilities and shareholders’ equity.

Cash Flow Statement

In addition to your business’s balance sheet, you should bring a cash flow statement when applying for a business loan. Cash flow statements are exactly what they sound like: financial statements that reveal a business’s cash flow. Your business has money coming into it in the form of revenue, and your business has money going out of it in the form of expenses. Cash flow statements provide insight into your business’s cash flow for a given period.

Profit and Loss Statment

Another important financial statement to bring when applying for a business loan is a profit and loss statement. Also known as an income statement, a profit and loss statement breaks down a business’s profits or losses for a given period. It’s similar to a cash flow statement. The difference is that a profit and loss statement measures your business’s profitability, whereas a cash flow statement measures your business’s cash flow.

Business Plan

You should bring a business plan when applying for a business loan. A business plan is a multipart document that contains information about your business’s goals and how you intend to achieve them. Lenders may use your business loan to determine your candidacy for a business loan. With a clear and attainable business plan, they’ll feel more confident approving your application and, thus, loaning you money.

Tax Returns

You may want to bring copies of your tax returns when applying for a business loan. Many lenders require applicants to provide copies of their tax returns. Some of them only require personal tax returns, but others require both personal and business tax returns.

This article was brought to you by Intrepid Private Capital Group, a Global Financial Services Company. For more information on startup and business funding, or to complete a funding application, please visit our website.

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