SBA Small Business Loan Checklist

What documents do I need for a small biz loan?

Most entrepreneurs (and even some bankers) are overwhelmed by the amount of paperwork that is required to obtain a small business loan or an SBA loan. While the process is time consuming, it’s important to realize that the more information provided to prospective lender(s), the more comfortable the bank(s) will become with you and your business thereby enhancing your loan prospects.

Below is a checklist of the major documents you should have at your fingertips before meeting with any bankers. The cliché you’ll never get a second chance to make a first impression rings true. So have as much of the list below completed as possible and have a friend, colleague, and/or business partner(s) review the entire applications for grammar, errors, and/or omissions.

Remember that in the final analysis the banker has to be convinced you a credible business  person who will ultimately pay back the loan, and not being to provide basic requested information or taking weeks or months to generate documents will do nothing but destroy your credibility with the very people you are trying to impress. Also, please note that the way to impress bankers isn’t by providing them with false or misleading information as fabricating information on loan documents in the U.S. is a felony.

Here is our SBA small business loan document checklist in order of importance, but note that all should be readily available upon request. All of the documents below can be utilized to ascertain what information will be required for a commercial small business loan, and the form numbers in parenthesis are the exact forms utilized by banks in the SBA 7(a) lender program. Inevitable whether you obtain a traditional commercial loan or a very popular SBA loan, the information requested will be similar.

  • Financial Statements –
    • Annual Balance Sheets for past 3 years
    • Annual Income Statements for past 3 years
    • Monthly Balance Sheets for past 2 years
    • Annual Income Statements for past 2 years
  • Projected Financial Statements for next 5 years with assumptions
  • Federal Tax Returns for past 3 years
  • Business Plan
  • Personal Financial Statement (SBA Form 413)
  • Monthly Bank Statements for past two years
  • Statement of Personal History (SBA Form 912)
  • Borrower Information Form (SBA Form 1919)

Optional but strongly recommended

  • Slide or Pitch Deck
  • Debt Schedule

 

Financial Statements

Historical financial statements along with projected financial statements for the future are a must. Without this information it will be impossible to get an SBA loan. If you do not have historical and projected financial results, we strongly encourage you to hire an accountant or financial analysts to create these statements for you.

 

Federal Tax Returns

In order to verify income, your banker will ask to see federal (and perhaps state) tax returns for the past three years (or longer) for the business. The bank may also ask to see your personal individual tax returns or W-2s as well to verify your personal income. In addition, some banks will ask you to complete IRS Form 4506T, which is your consent for the IRS to send copies of your tax returns directly to the bank.

 

Business Plan

A detailed 20 – 40 page business plan is an important aspect of any loan request. The bank will want to know that you have a well thought out plan to grow your business and repay its loan. Providing detailed information on how to create an effective business plan is beyond the scope of this article, but suffice to say here that at a minimum a business plan should include the following:

Value Proposition – What value are you providing to your customers

Business Model – What exactly your business does

Go to Market Strategy – How you plan on selling your product or service

Management Team – Key personnel with short bios on each

Financial Statements – Both historical and projected with key assumptions

Sources and Uses – How much you are looking to raise and how you are going to spend it

 

Personal Financial Statement

In addition to collateral for the business, which the bank can ascertain from a review of the financial statements, your lender will also ask you to complete a personal financial statement form. This gives the bank an indication of your collateral personally outside the business. Don’t fudge the numbers on the personal financial statement as your credibility will take a hit and it’s a crime to do so. To get a flavor for what a Personal Financial Statement looks like for an SBA loan, check out SBA Form 413. Popular personal financial software packages like Quicken have standard reports to generate this information. If married the bank may require both to complete personal financial statements. In addition, the SBA requires that all principals who own 20% or more of the business personally guarantee any SBA loan. Commercial (i.e., non-SBA loans) typically require personal guarantees as well but commercial small business loans may have different ownership requirements levels before personal guarantees are required.

 

Bank Statements

Bankers love bank statements, so have copies readily available for the past two years. You do not need to present bank statements in your initial set of documents to the bank, but have these bank documents readily available if the bank is ready to move forward with due diligence.

 

Statement of Personal History

Your SBA lender or commercial lender will undoubtedly want to run a background check on the 20%+ owners that will at a minimum include a criminal background check. Individuals with criminal records will find it more difficult to obtain bank financing. SBA Form 912 includes the types of questions that will be asked. Typically banks will ask you these questions through SBA or their own bank forms and then follow that up with verification from third parties regarding the truthfulness of your responses.

In addition to a background checks, prospective lenders will also ask you to sign a document authorizing them to run a credit report. You credit score will have a big impact on the bank’s decision to give you a loan. A FICO score in the high 600s or higher is ideal; a FICO score in the low 600s is more challenging; a FICO score in the 500s makes obtaining a small business loan very difficult. So know what your credit score is and if it is low be prepared to answer questions regarding it.

 

Optional but recommended documents

 

Borrow Information Form

SBA Form 1919 requests generalized information and is required for all small business SBA loans through the SBA 7(a) program.

 

Slide or pitch deck

In addition to a 20 – 40 page business plan, a 8  – 15  page “slide” or “pitch” deck is recommended with a software package like PowerPoint. You can find blank slide decks with graphics and images on sites like SlideTeam.net for a few dollars if you aren’t a PowerPoint whiz. Printing this document out and providing it to a banker is fine, but we strongly encourage you to present the pitch just like you would to an outside investor only tailor it to the bank obviously. Unlike an equity investor who really focuses on upside potential for your business, a lender or any other debtor will focus heavily on the business’s ability to repay the loan and your character. A really nice template for a pitch deck is provided by Guy Kawasaki at https://guykawasaki.com/the-only-10-slides-you-need-in-your-pitch/.

 

Debt Schedule

Any banker will want to understand what loan(s) you and your business already have, so it’s important to put together a loan schedule showing all the key terms in a summary format. We have included a sample debt schedule for your review. Note that the bank may also ask to see any loan documents for existing debts that appear on your schedule. Just like with the bank statement copies, it is not necessary to send copies of  existing loan documents to your potential lender initially. However, it is recommended that you have them on hand and ready to send should the bank request them.

 

We hope this loan document checklist helps. Please feel free to ask any questions in the comments section below or reach out to us privately if we can answer any questions not suitable for a public forum. Good luck in your financing quest for your business!

 

SBALenders.com Team

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