An Ultimate Guide On Commercial Loan Documentation Checklist

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AN ULTIMATE GUIDE ON COMMERCIAL
LOAN DOCUMENTATION CHECKLIST
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DOCUMENTATION CHECKLIST
Getting working capital for operational expenses
can make or break your small business. If you
require funding to fund your commercial projects
and in search of business loans with little
paperwork process, its best to go over the
commercial loan checklist.
The good news is that most of them have lenient
qualification requirementsand, follow stack of
business loan documentation through which they
assess borrowers credibility. If you get
yourself fully prepared before applying for
loans, youll have a better chance of qualifying
along with easy loan application process.
The process of getting commercial financing may
seem intimidating, but the process is easy if
youve the documentation ready. Lenders actually
willing to assist small businesses secure the
capital they need. They only afraid of working
with borrower who cant repay them or have bad
credit histories.
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No matter what business loan type youre applying
for, there are few things you need to understand
and get yourself prepared for before you jump
into the commercial loan application process.
Every lender requires documents, so you should be
ready to have those documents and pieces of
information by your side including
THE BASICS
When applying for a business loan, your personal
credit score really matters in a lenders
decision to approve you for funds. Personal
credit history acts as a solid indicator of your
past performance of well you were able to manage
your businesss finances. Lenders use this
assessment to objectively assess your ability to
handle the cash you need for commercial expenses.
Business Information Permits
Just like your personal information, your
business information should also be added to your
documentation checklist including business
physical address, business type, and employer
identification number (EIN).
Personal Credit Score History
Access to any business licenses and permits is
also needed for lenders to ensure youre legally
operational. You need to make sure all permits or
licenses are updated and valid before adding them
to your documentation.
Just like your personal credit score, your
business credit score also plays an important
role in your business loan qualification. Its
different than your personal credit score, but
can affect your possibility of getting a
commercial loan (or any other business loan type).
Business Credit Score
Business Permits
You also need to have tax returns for at least
two years (both business and personal) to verify
your income and revenue. Lenders will surely ask
for business tax returns, but some might ask you
for personal tax returns as well. So, make sure
you file them properly and have the current tax
returns for review.
As a business owner, your personal information
should be added to your commercial loan
documentation checklist including your name,
physical address, SSN, valid ID, etc.
Personal Information
Tax Returns
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Loan Purpose
You should have a document of how you will use
the loan being it an important document for the
lender. How you will use the funds and for what
purpose. If the cash is to finance an equipment,
a quote needs to be provided for the equipment.
In case of working capital, explanation is
required for the projects on which funding is
intended.
Collateral
While applying for loan, youll have to provide
collateral documentation to the lender. These
documents will prove what type of collateral is
youre using to get your commercial loan approved.
A business plan is an important element of your
business loan application. Lenders use a business
plan to understand exactly what you plans are for
the company, whether youre an established
business or just starting out. This also provides
insights into your companys policy, purpose, and
the approaches youll use to achieve your goals.
This is particularly imperative for startups
since they dont have a track record.
Business Plan
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Basic information on the parties involved
(Owners, Development Management Company, etc.)
The deed of the property
Contracts for sale and purchase
Existing liens
Property tax receipts
Property leases and/or rental agreements
Pictures of the property
Evidence of any insurances
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Documentation for SBA Loans
It is the most desirable financing option, but
that too comes with a lot of paperwork. These
loans are the most paperwork-intensive in case of
commercial loans. Youre required to provide
personal data including your equity investment
along with many of their exclusive forms, like
SBA form 912 or SBA form 159. Here is a resource
to help you get started with an SBA loan
application.
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The Bottom Line
Every commercial loan involves somewhat different
documentations, but if youre organized well and
prepared early, getting funding without the
hassle is as easy as eating as a pie. This
checklist will not only get you a realistic
picture of business financing options, but also
improve your chances of getting a quick YES on
your loan application.
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