Feeling overwhelmed by the commercial loan application process? Don’t worry—we’ve got you covered! This step-by-step checklist will help you gather everything you need, from financial documents to business plans, ensuring a smoother path to loan approval.
Applying for a commercial loan can be overwhelming, but proper preparation makes all the difference. With this step-by-step guide, you’ll know exactly what to gather and how to position your business for success.
Commercial loans can help finance business growth, fund equipment purchases, or support real estate investments. But lenders are thorough—they need to know your business is financially stable and capable of repayment. That’s why it’s crucial to have the right documents in hand.
Let’s break down the essentials so you can approach your lender with confidence.
A commercial loan provides businesses with access to funds for growth, investments, or day-to-day operations. Unlike personal loans, commercial loans are designed to address specific business needs, such as:
But to secure funding, lenders require detailed documentation to assess your financial health and repayment ability. Being prepared ensures your application process goes smoothly—and that’s where this checklist comes in.
Your website acts as a virtual storefront, giving lenders insight into your business’s legitimacy and online presence.
Pro Tip: If you don’t have a website yet, now’s the time to create one. Even a simple landing page can increase credibility.
A strong business plan demonstrates your company’s mission, market position, and potential for growth. This is one of the most critical pieces of your loan application.
What to include:
Helpful Link: Need help understanding how to structure your business? Visit the Small Business Administration’s guide on business planning for detailed instructions.
Your business’s financial health is at the center of your loan application. Lenders will want to see clear, detailed financial statements, including:
Helpful Link: Learn more about how lenders assess financial health at the Federal Reserve’s financial tools for businesses.
Many commercial loans require collateral to secure the funding. Collateral could include:
If you’re seeking financing for a business acquisition, don’t forget to include the Letter of Intent (LOI) or Purchase Agreement, which outlines the purchase price and key terms of the sale.
Helpful Link: Check out SCORE’s mentorship and resources for expert advice on business acquisitions and financing strategies.
Lenders will likely ask:
Prepare clear, confident answers to these questions before meeting with a lender.
If you’re unsure about your financial statements or business plan, work with an accountant or business consultant to polish your application.
Helpful Link: Use the U.S. Chamber of Commerce’s small business financing resources for additional guidance.
Your business plan, financial statements (balance sheet, income statement, cash flow), and collateral documents are the most crucial components.
Not always. Some loans, like unsecured loans, don’t require collateral but typically come with higher interest rates. A majority of business loans will require collateral such as all business assets made up of accounts receivable, inventory, equipment, real estate, and all other assets.
Approval times vary by lender but generally range from a few days to several weeks, depending on the complexity of your application.
Make sure your financial statements are accurate, your business plan is thorough, and you’re transparent with your lender about your needs and repayment plan.
Applying for a commercial loan doesn’t have to be intimidating! By following this detailed checklist and preparing your documentation ahead of time, you’ll increase your chances of securing the funding your business needs.
Need additional resources? Download our Commercial Loan Application Checklist to ensure nothing falls through the cracks.
And remember, organizations like SBA and SCORE are here to provide expert guidance as you navigate the loan process.
Security Bank & Trust Co. is also here to make financing your next business move as seamless as possible. Whether you’re investing in equipment, real estate, or growth opportunities, we’re ready to help.
Related Reading: