Video transcript: Your small business loan application checklist

Your small business loan application checklist

Someday you may need a small business loan. Review this application checklist to make sure you’re ready. Presented by Chase for Business.

 

Every lender may have their own forms and requirements to apply for a small business loan, but most will require some common documents. By gathering these documents ahead of time, you can be more prepared for the application and loan process and get the money you need to start or grow your business. This small business loan application checklist will help you be ready with the documents you may need to provide. (Note that you may not need all document types, depending on the amount of your loan.)

 

Business loan proposal

Lenders want to know how much money you need, how you’ll use it and, most importantly, how you plan to repay it. A business loan proposal outlines this information in a clear and concise manner. Not all lenders will require a proposal, but for those that do, it’s often the first thing they look at.

While much of this information is also included in your business plan, your proposal is more targeted to the specific details of the funds you are currently seeking. You’ll need to be able to demonstrate your current (if applicable) and forecasted cash inflows and outflows and how the potential loan payments fit into your overall cash flow.

 

Small dollar lending

What constitutes “small dollar lending”? It depends on who you ask. Many lenders — including the government — offer lower-cost loans with their own qualifying amounts. At Chase, our Business Term loans start at $5Kbusiness-line-of-credit-info and our Business Lines of Credit (LOCs) start at $10K.business-line-of-credit-info-2

 

Income tax returns

When applying for any type of business loan, be sure to have the most recent business and personal tax returns for you and any other principals of your business available for review. Most loan programs will require these forms for the previous three years.

 

Financial statements

To get a complete financial picture of your business, most small business lenders require financial statements. These may include personal bank statements from you and any owners with more than a 20% stake in your business. A current profit and loss statement or earnings report, a balance sheet with a breakdown of assets and liabilities, and an income statement for your business.

Keep in mind that once you’re approved for a business loan, it’s a good idea to update these documents to reflect any additional capital and better manage your cash flow.

 

Credit reports

Lenders will typically pull up credit reports when reviewing your loan application. However, before you submit your application, it’s a good idea to review your personal and business credit reports yourself to ensure their accuracy and have time to clear up any issues that could affect your loan approval. Once again, lenders may also look at the credit reports of any partners.

Required credit scores may vary, depending on the type of loan you are applying for and your loan originator. It’s a good rule of thumb to pay any personal or business debts on time to maintain a good credit score.

 

Legal documents

You may have to submit various legal documents, depending on the amount and type of loan requested and the lending institution’s unique requirements. While you most likely won’t need all of these documents, it may save you time to have them ready:

 

Collateral documents

Sometimes lenders require collateral to secure a loan. The more convincing your business plan and forecasted profits, the better your chance of obtaining a loan without it, but it’s good to be prepared. Keep in mind that it's the policy of some lenders to require collateral for loans over a certain amount.

Common collateral includes real estate, business equipment, inventory and other business assets. Before you apply for your loan, decide what you can put up for collateral and its value. For instance, if you own real estate, you can list the property address, the price you paid and its current assessment.

 

The bottom line

If you’re like most small business owners, there will come a time when you’ll need some type of funding. Regardless of when that is or what it’s for, having these documents ready before you apply will help make the process smoother, and may improve your chances of receiving the capital you want quickly.

A Chase business banker can be a valuable resource in helping you gather information and determine the amount and type of loan you may need to grow your business. There are no fees to apply for a Chase Business line of Credit.

 

Chase Business Term Loans are typically 5 years. $0 origination fee, prepayment fees apply to loans greater than $250,000. Term loans are available for $5,000 - $500,000. Online application for $5,000 - $250,000. Fixed monthly payments consisting of principal and interest are based on your loan agreement. Product available in all U.S. states, excluding Hawaii and Alaska. Customers seeking different terms or more information should contact a Chase representative.

The above material is for promotional purposes only. All extensions of credit are subject to the credit approval process of JPMorgan Chase Bank, N.A.

These materials are intended as an outline and do not summarize all the terms, conditions, representations, warranties, and other provisions to be mutually agreed upon and contained in definitive loan documentation. Standard loan documentation to be made available prior to closing. Interest rates and eligibility requirements may differ among different geographic locations. Restrictions and limitations apply.

Chase Business Line of Credit Annual Fee: 0.25% of line ($200 min; $750 max). After the first year, fee is waived if average utilization for the prior year is 40% or higher.

Chase Business Line of Credit has a revolving period of up to five years. At the end of the five-year revolving period, there is a five-year repayment period with the potential to renew. The revolving period may be terminated by Chase at any time in its discretion. Maximum request amount is $500,000. Visit your local branch to discuss more options to meet your business needs. Product available in all U.S. states excluding Hawaii and Alaska.

Please consult your branch or relationship manager for the latest interest rates, associated fees (Appraisal, Recording, Tax Transcript, etc.), closing costs and/or balance requirements as they may differ among different geographic locations. Not all products and services are offered at all locations.

This article is for Informational/Educational Purposes Only: The opinions expressed in this article may differ from the official policy or position of (or endorsement by) JPMorgan Chase & Co. or its affiliates. Opinions and strategies described may not be appropriate for everyone, and are not intended as specific advice/recommendations for any individual or business. The material is not intended to provide legal, tax, or financial advice or to indicate the availability or suitability of any JPMorgan Chase Bank, N.A. product or service. You should carefully consider your needs and objectives before making any decisions, and consult the appropriate professional(s). Outlooks and past performance are not guarantees of future results. JPMorgan Chase & Co. and its affiliates are not responsible for, and do not provide or endorse third party products, services or other content.

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