Questions Prospective Lenders Will Ask Before Loaning Business Money
If you're planning to approach a commercial lender for the financial assistance necessary to grow your business, be prepared for a list of questions. The following list attempts to anticipate what some of those questions might be.
- How will you use the loan proceeds?
- How will you repay the loan?
- Does your business have the ability to make the payments required under the loan?
- How much money do you need?
- Can you put up any collateral?
- Are you willing to put up any personal guarentees?
Also, the lenders will typically request the following documents:
- Your company's incorporation or other organizational documents
- Your company's tax returns for the last three years
- Your profit and loss statements and balance sheets for the last three years
- A business plan
- A description of any litigation or bankruptcy filings
- A completed loan application
- Your board of directors minutes approving the borrowing (for corporation)
One way to improve your chances of getting your loan approved and to make sure you have solid and complete answers to all these questions is to prepare a written proposal. Read for more information.
