Have you ever had a customer or client get in touch with you about some work and, after asking a few basic questions regarding the specifics of the job and hearing ‘I’m not sure - I’ll have to check’ as the repeated response, you wondered how the hell you were ever going to complete the project to the best of your abilities so they’d be 100% happy with the result?
Speaking with a lender without the right information on hand about your business is exactly the same; they’re simply not going to be able to do the best they can for you. But if you haven’t applied for a business loan before, how are you to know what to bring with you? Don’t stress though, that’s why we’ve put together this list of 7 things that are an absolute MUST to bring with you when applying for a business loan.
Item 1. Identification
The types of identification will vary depending on the type of business it is. A sole trader will likely need 100 points of identification that may include a driver’s license or passport, credit card, Medicare card and bills whereas a company would need its registration, for example.
Item 2. Business plan
If you’re starting up a new business, you’ll need to provide a business plan which includes information such as structure, product, market and financials. While this may not need to be outlandishly comprehensive in size, you may find that putting a reasonable amount of time and effort into your business plan may help clarify things that otherwise may have been overlooked, so it’s a good idea to do so.
Item 3. Business financials
The lender will want to look at where your business is currently at financially, covering everything including assets, liabilities and net worth - in essence, a detailed balance sheet plus income statement - in order to make sure you have the cash flow to be able to make repayments on time for your proposed loan amount. It is highly advisable to have all of this information prepared by your accountant.
The lender may also request documents such as BAS (Business Activity Statements), most recent tax returns, details about trust or SMSF accounts and other printable documents available from the ATO. As such, print out any and all of this beforehand and have it all with you just in case.
Item 4. Proof of personal income
A lender will not just want to review business financials; company directors and shareholders will also need to provide documentation showing their individual income which can be in the form of tax returns over the two most recent financial years, plus notice of assessment for both. All of this can be easily viewed and printed from the ATO online portal.
Item 5. Personal and business bank statements
Lenders will want to know about all of your finances, which means printing off the latest bank statements for each of your personal and business accounts including credit cards.
Item 6. Cash flow projections
Another important piece of information that new businesses need to bring with them is cash flow projection (also known as cash flow forecast). This is a document that includes all of the business’ projected income and expenses which should span one to two full years. This may also include the ‘break-even point’ - the point of time at which the total revenue is equal to total costs/expenses.
Item 7. Lease agreement
If your business is running out of a bricks-and-mortar location, make sure you bring along your lease agreement for the commercial property from which you’re operating - especially if it’s a startup.
Speak with the experts in business loans today
If you’re keen to get things moving and apply for a business loan, we’re here to help you do just that. We understand that a slow-moving process can be detrimental to a business - whether it’s losing potential revenue due to not being able to meet demand or being pushed further into the red, we get that the quicker everything happens the better.
Which is why if you want to make sure things go smoothly and hastily, you need to give the team at Stratton Finance a call now on 1300 787 288. Alternatively, we’re available via our online contact form and will be in touch ASAP once we receive your enquiry.