Documents Needed For A Bank Business Loan

Bank business loans offer low interest rates and flexible terms, making them attractive to small businesses looking for a low-cost business loan. However, banks require extensive documentation to apply for the loan because they want to see that you have a strong ability to repay the loan.

You may need to provide personal and business bank statements, tax returns, credit history and more to show your creditworthiness. Despite the involved process, you may find the bank’s terms and rates well worth the effort, especially if you have a well-established business with good or excellent credit.

Familiarize yourself with your lender’s business loan requirements and what documentation is needed to ensure no delays with your application.

Business loan documents about yourself

The lender will request personal information to see how you manage your personal finances. Your personal financial management shows the lender how well you might manage a business loan. Information and documents needed for a business loan:

• Personal identification verifying your name, personal address, date of birth and Social Security number
• Banking statements
• Personal tax returns (may or may not be required, but helpful to have on hand)
• Your resume to show your experience in your industry

Business loan documents about your business

As a rule of thumb, traditional bank lenders may require more business loan documents than competing online lenders. Documentation about your business that you may need for a bank business loan:

Founding and legal documents 

• Articles of incorporation
• An operating agreement (if your business is an LLC)
• Information about your business name and registration
• Ownership structure
• Franchise information, if this applies
• License and/or permit documents, if applicable
• Business plan to show how you plan to make your business profitable

Business financials

Other documents needed for a bank business loan

You may need these additional documents when applying for your bank business loan:

• Information about assets: If you’re going with a secured loan, you’ll also need to provide collateral information on the assets you’re using to secure the loan. These assets may include equipment, technology, vehicles, real estate and bank accounts. You may need to include an appraisal to prove the asset’s worth.
• Uniform Commercial Code (UCC) lien: Some lenders require a UCC lien filing to formalize their right to your collateral if you default. The lender should generate this as a part of your loan’s closing documents, so you are not responsible for creating it.

Documents for an SBA loan from a bank

Certain SBA loans will require additional business loan documents or forms to apply. You can apply for these loans through traditional banks, though they are funded differently from conventional business loans. To apply, you may need:

• A summary of the business history and its challenges
• Information about how an SBA loan will help the business
• Business lease information, if this applies
• SBA forms: You may need to include SBA-specific forms like Form 413 and Form 1919.
• Business acquisition: If you plan to use your 7(a) loan or another type of SBA loan to buy another business, you will need to include additional documentation about that business, its assets and its history.

Bottom line

Banks are known for requiring more documentation when applying for a business loan than other lenders. This documentation is important because it shows the lender your financial track record and ability to repay the loan. You can ask the lender for a thorough list of documents it requires before you submit your application. Having as much information on hand as possible can keep the application process running smoothly.

Frequently asked questions

• What documents does a bank need for a business loan?

  In addition to a complete loan application, you’ll provide the bank with various business loan documents. These documents may include providing financial statements, a business plan, tax returns and collateral details to the bank.

• How long does it take a bank to approve a small business loan?

  Securing a small business loan from a bank can span days to weeks, with processing time largely contingent on the underwriting process.

• How hard is it to get a small business loan from a bank?

  Approval for a bank loan depends on the business’s credit score, time in operation, annual revenue and more. To increase your odds of getting a bank to approve a business loan, you’ll want to present a strong credit history, solid business plan and accurate financial records to demonstrate your financial health and ability to repay the loan.