What do you need to get a small business loan?


Alternative lenders like National Funding are a great source for small business loans, and while they offer greater ease of access and more flexible payment terms, they too still require some paperwork and documentation during the approval process.

So what do small business owners need when applying for a loan? Typically, requirements include the following.

Loan application form

Business owners should be prepared to detail why they’re applying for the loan, how they will use the funds, what assets they need to purchase and from what suppliers, what other business debt they have and from what lenders, and who the other members of the management team are.

They also likely will have to outline their personal background so creditors can get a sense of whether or not they can be trusted to repay a loan. Details they likely will have to provide include previous addresses and names, criminal record, and educational background.

Credit report

Applicants will have to submit a business credit report if they already are in business and are seeking more working capital. Personal credit reports also are typically requested, and in both cases, an applicant should request a free report from the three credit bureaus before applying for a loan to verify their accuracy and strength.

Similarly, some lenders request personal and business tax returns from the previous three years to ensure the applicant’s financial standing.

Financial statements

The financial statements submitted to alternative lenders typically are calculated by applicants using a balance sheet, income statement, cash flow, and bank statements. Many lenders request a year of personal and business financial statements to be considered for a loan.

Legal documents

Some lenders may request an applicant submit legal documents, which could include: business licenses and registrations; articles of corporation; copies of contracts with any third parties; franchise agreements; and commercial leases.


National Funding does not require collateral, but some alternative lenders may require collateral in the event that an applicant doesn’t repay the loan to its full terms. Small business owners, then, should be prepared to submit a collateral document that details the cost or value of personal or business property. However, if all the above documents are submitted correctly and meet the lender’s requirements, they may not ask for such a statement.

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