Hyak Financial

A Good Business Loan Package

In today’s lending environment, it is more important than ever to have a complete, organized and well prepared commercial loan package when approaching a lender for a loan. Below you will find the components of a typical business loan package.  This does not cover everything a potential lender may ask for, but will get you off to a great start!

Executive Summary

The executive summary is the proposal that explains what type of commercial loan you are seeking and why.  The executive summary should contain enough information for the lender to understand your request, and any important details that should be known up front.  The executive summary is NOT you business plan, but simply a ‘snapshot’ of your loan request.

Personal Financial Information

Most small businesses will be required to personally guarantee their loans, and this is especially true in today’s market.  Good credit is usually mandatory (but not always, with hard money loans being the most common exception). The following personal information should be included in your loan package.

  • Personal Financial Statement – Current  and for Each Owner/Guarantor
  • Personal Tax Returns – Most Recent 3 Years for Each Owner/Guarantor

Business Financial Information

Lenders will need to have a good understanding your business, and its history.  If you have a current business plan, that will usually work, if not, you should provide detailed information in your Executive Summary.

The following business financial information should be included in your loan package:

  • Business Tax Returns – Most Recent 3 Years  for Each Entity
  • Profit & Loss – Most Recent 3 Years for Each Entity
  • Profit & Loss – Interim (YTD) for Each Entity
  • Balance Sheet – Most Recent 3 Years for Each Entity
  • Balance Sheet – Interim (YTD) for Each Entity
  • Business Debt Schedule – Current (shows loan balance, payments, rates, terms, etc.)
  • Business Projections (usually for SBA loans)

Real Estate Transaction Information

In the case of real estate secured loans, the following information is necessary:

  • Real Estate Purchase & Sale Agreement (purchases only)
  • Real Estate Operating Statement (investment properties)
  • Property Rent Roll (investment properties)
  • Property Operating Statement – Most Recent 3 Years  (investment properties)
  • Property Operating Statement – Year To Date  (investment properties)
  • Property Leases (investment properties)
  • Real Estate Appraisal (if available, but will usually be ordered by the lender)
  • Property Tax Statement with Legal Tax ID #

An accurate and complete business loan package will get a quicker decision from the lender, allow you to ‘shop’ your request more quickly, and can lead to better rates and terms upon approval.

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