Three people sit around a table. The person on the far left wears a shirt and tie and holds up a piece of paper, which the other two people, a man and a woman, look at with interest. On the table are an open laptop, an electronic tablet, and a takeout coffee cup.
A potential lender will examine documentation like your credit report and your income tax returns to determine whether you're a good candidate for a loan or too much of a risk. — Getty Images/courtneyk

Whether you need help expanding your operations or managing the cash flow, loans can be instrumental in the growth and success of a small business. Although loan requirements will vary from lender to lender, here are some important documents to prepare when applying for a small business loan.

Credit report

When examining your credit report, lenders can evaluate how you have managed debt and if you have ever declared bankruptcy. Your credit report helps them decide if you are a good candidate for a loan or if you are considered too risky. Generally, a credit score of 700 or higher is considered ideal when looking to secure a business loan.

If you have managed your debt responsibly and made regular, on-time payments, you probably won’t need to worry when lenders examine your credit report. However, if you have a low credit score and poor credit history, build your credit before embarking on the small business loan application process.

Bank statements

Your bank statements provide prospective lenders with a glimpse into your deposits, withdrawals, and balances. This information gives them a better sense of your business’s financial health and your ability to pay back your loan. Your bank statements will also reveal if you have any outstanding debt you need to pay off.

Based on your bank statements, a lender can estimate how much money you’ll be earning and spending in the future and calculate where their loan may fit into that balance. A bank may be deterred if you are spending more money than you earn or if your income amounts are irregular and, therefore, unreliable.

[Read more: Small Business Funding: A Breakdown of Business Loan Types]

Income statement

To measure your business’s profitability over time, lenders will want to reference your income statement. Based on this financial document, a lender can estimate your sales volume and profit margins to decide how sustainable your business is. Lenders will have minimum criteria that your business must meet to qualify for a loan. Depending on the lender or specific loan, that minimum may be based on revenue or sales volume. Since this factor in qualifying for a loan is so cut and dry, you can do a preliminary check to make sure you qualify before wasting time applying.

[Read more: 3 Things to Do After You're Rejected for a Business Loan]

When examining your credit report, lenders can evaluate how you have managed debt and if you have ever declared bankruptcy.


As a small business owner, you’re no stranger to working on a budget. Lenders will want to know not only where your money is going but why your money is being spent the way it is. Beyond calculating the longevity and financial health of your business, lenders can also use your budget to get a better understanding of how you run your company. If you have a carefully maintained a well-executed budget, you can likely handle the regular payments necessary for repaying a loan.

Business plan

While documents like tax returns or bank statements are already set in stone, your business plan is one you can adjust for your application. An appealing business plan is organized, well-put-together, and clear. Don’t cut any corners; include a cover page with your business’s logo and table of contents outlining what’s to come.

An executive summary is especially important because it allows lenders to get a quick introduction to who you are and what your business is all about, and decide if it’s worth reading any further. Include an explanation of what your business does as well as how your company stands out from the competition.

Income tax returns

Gather your most recent tax returns for your small business loan application. Your tax returns can verify your income and give lenders a look at your debt-to-income ratio. Lenders calculate your ratio by dividing any monthly debts by your gross income. If your debt-to-income ratio is over 43%, lenders will typically consider you a high-risk borrower and may reject your application. Prepare both your business IRT and your personal IRT for lenders to review.

Ready to apply for your small business loan? Check out our guide to help you get started.

CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.

CO—is committed to helping you start, run and grow your small business. Learn more about the benefits of small business membership in the U.S. Chamber of Commerce, here.

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