What lenders want to see

Click on each item to see what a lender, like any smart investor, will likely want to see if you apply for a business loan.


A detailed business plan
This will show the lender that you've carefully thought through all aspects of your venture - from your products and production methods, to your customer-base and competition, (There are plenty of resources available to help you create a business plan. Click on Library to learn more.) Also be prepared to show financial projections that show expected revenues vs. costs.
Your own personal investment
A lender will have greater confidence in your commitment to succeed when they know you have your own money invested. Many lenders often require this.
Other sources of repayment
Lenders typically want borrowers to have assets that, in case of an emergency, they could sell in order to repay the loan.
A strong credit history
Every time you borrow money and keep your promise to pay it back, you're proving to lenders that you keep your promises. By showing them that you're trustworthy, you strengthen your ability to borrow again the next time. Your credit history often holds the key that opens the door to capital funding.
A sound record-keeping system
Think about it: would you loan money to a business that didn't keep comprehensive, up-to-date records? The bottom line is: a business can't manage what it doesn't measure. Good recordkeeping is at the foundation for your company's future success.
A team of advisors or unpaid Board of Directors
Businesses structured as corporations are legally required to have a Board of Directors. But even if your business is not incorporated, this is an excellent, no-cost way to gather a circle of expertise around you and your enterprise. There may be many individuals who would gladly volunteer occasional time to advise you.
Close
If you apply for a bank loan during your business start-up and growth phases, realize that you're not simply asking for money - in reality, you're asking the lender to invest in you and your business.
To learn more about the basics of borrowing money, see the topic Using Credit to Your Advantage.
The money you need Deciding whether to borrow Three types of small business credit Loans vs. lines What lenders want to see