Tips for Preparing for Your Business Loan Meeting

Guest Column By:

By Douglas Smith
SVP, Community Banking Sales Director
Sun National Bank

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.

List Your Collateral

You will need to show you have assets that can serve as collateral. Depending on your business and personal circumstances, collateral can include:

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

Understand Your Options

It’s important to know the different loan types available and how they can support your business. Popular business financing options include:

  • Business term loans to meet one-time financing needs, such as renovating your facility or purchasing equipment
  • Business lines of credit to provide flexibility for short-term cash flow
  • Commercial mortgages to give your business room to grow

The information contained herein is for general informational purposes only and does not constitute tax, legal, or business advice.