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Grow Your Business Finances

What You Need for a Small Business Loan Application

What you need for SMB loan app
Credit: Andrey_Popov/Shutterstock

Acquiring funding can be a long process for any small business. Depending on the type of loan you apply for, it could take anywhere from a few weeks to a few months to receive financing. Underwriting and loan processes vary from lender to lender, but there is some important documentation you can have ready to speed things along.

Alternative online lenders are the quickest way to get financing, but these deals carry the highest rates. Often, they'll ask for limited documentation and provide technology to hook right up to your bank account so they can underwrite your cash flow. Eric Sager, chief revenue officer for BlueVine, said his company does this.

Conventional business loans are in the middle ground in terms of timing but include a longer underwriting process. Banks also have stringent qualifications for borrowers compared to alternative lenders, so depending on your financial history and credit score, you may not get a loan. Scott Anderson, an audit partner with Sensiba San Filippo, said regardless of who the lender is businesses should have financial statements at the ready when they apply.

Editor's note: Looking for business financing? Use the questionnaire below to have our sister site, BuyerZone, provide you with information from a variety of lenders for free.

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SBA loans could have the lowest rates but will take the longest to apply for. Joe Camberato is the president and co-founder of National Business Capital. His company matches borrowers with lenders and provides advice through the process. He said SBA loans require more documentation but are a good option for business owners looking to make big expansions.

Regardless of the type of loan you apply for, there's some marquee documentation it's important to have at the ready. Here's a breakdown of the specific information you'll need based on the type of lender. Keep in mind that these requirements are general requirements. Specific documentation requirements l vary widely by lender.

General requirements:

  • Bank account information
  • 3 to 6 months of bank statements
  • Credit check (sometimes)

Alternative lenders have relaxed documentation requirements compared to other lenders. Sager said BlueVine conducts a lot of its underwriting processes by analyzing current banking information and looking at past bank statements.

Some online lenders require a credit check as well, while others won't. Regardless of which alternative financier you're using, know that they can get you fast funding, but it will likely be at a higher rate compared to a conventional or SBA loan. [Interested in an alternative small business loan? Check out our best picks.]

"We can very quickly establish how much revenue are you making, what's going out in expenses potentially [and] what other loans you already have," Sager said. "That allows us to very accurately underwrite the cash flow of that business, and it allows us to make offers very easily."

Introductory requirements:

  • Financial statements
  • Building lease
  • Credit eligibility

Like all lenders, banks want to assess the financial health of your business. To do this, they'll require a significant amount of documentation. It won't be the same as an SBA loan, but be ready to provide financial documentation to give the lender an idea of your business's health.

"Everybody wants to see financial statements. It can be cash basis, accrual basis, or gap, but the most important thing is regular and consistently prepared financial statements," Anderson said. "It's pretty simple – before you plan to go ask for money from somebody, have everything you could possibly have ready to go to ensure you have the best opportunity of striking a deal in a relatively short time frame."

Introductory requirements:

  • 2 to 3 years of tax returns (business and potentially personal as well)
  • Last year's financial statements
  • Year-to-date financial statement
  • Building lease
  • Credit eligibility – 680 or higher, according to National Business Capital

These requirements are a few base-level requirements. In addition to this documentation, you may have to provide more information about your business. The U.S. Small Business Administration (SBA) is very thorough in its loan process. After all, if you're approved, it will be guaranteeing between 75 and 90 percent of your loan to the lender. Camberato said this list is good documentation to have ready when you apply for the loan. It should hopefully speed up the process. [Find out why SBA loans differ from conventional loans.]

He said that NBC's technology can move the process along as well. 

"Going to a bank direct, it's probably a 90- to 120-day process," he said. "We've got it down to about 30 to 45 days. We completed an SBA transaction in 29 days this month, which was … fast."

Matt D'Angelo

Matt D'Angelo is a Staff Writer based in New York City. After graduating from James Madison University with a degree in Journalism, Matt gained experience as a copy editor and writer for newspapers and various online publications. Matt joined the team in 2017 and covers technology for Business.com and Business News Daily. Follow him on Twitter or email him.