Applying for a business loan or line of credit may be a crucial step in opening a business or growing your company. To ensure a successful relationship, your lender will request documents and ask questions about you, your business, and your goals. Being well-prepared can help you demonstrate the creditworthiness of your business. Here are five ways to get ready: 

 

Create a Business Plan

Lenders like careful planners. Be sure to have a clear, detailed explanation of your business and its goals. Be ready to discuss your products or services, your industry, and the steps you are taking to build long-term success. Also, be prepared to outline the purpose of the loan, whether it's to open a new business, finance an expansion, secure equipment, or start a new service line. You will also need to document your ownership structure: LLC, Sub S, sole proprietorship, etc. Your business plan should include a careful market analysis and information about your competitors. 

 

Prepare Your Financial Statements

Your lender will want to review your financial documents too. Bring both personal and financial statements. Be sure to have a thorough balance sheet that summarizes your assets, liabilities, and shareholders' equity, as well as a profit and loss (P&L) statement to show your financial results over a period of time. And make sure you prepare projections for the business's future revenue and expenses in order to demonstrate long-term stability.

• Accounts receivable
• Cash and deposits
• Business equipment
• Inventory
• Real estate holdings