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10 Things You Need To Prepare When You Apply for a Business Loan

Are you growing your business?

All businesses need to start with capital, and usually owners get loans to get going. If you’re not sure what to prepare for a business loan—whether from a bank or from a lending organization like Cebuana Lhuillier—you should consider collecting the following to get you ready.

1. Collateral – this is an asset or a set of assets that the borrower gives in order for the lender to secure the loan. It offers security to the lender in case the borrower doesn’t pay the loan back.
2. Business Plan – a plan that contains your vision, mission, objectives, and budgets for your business to operate.
3. Accounts Receivable – this is money owed to debtors.
4. Accounts Payable — This is money that a business owes because it has been given proper goods and/or services.

5. Personal Credit Report – a summary of your financial information, including your creditor report.
6. Income Tax Returns – a document with the BIR that reports your income, profits, and losses of your business, as well as other deductions.
7. Financial Statements – a document reporting your financial activities and the position of your business in terms of assets and liabilities.
8. Bank Statements – record of your bank account’s balance, how much you’ve withdrawn, and much you’ve deposited.

9. Legal Documents – It depends from the lending organization or bank, but you might have to disclose certain legal documents like: business licenses and registrations, contracts with third parties, franchise agreements, and commercial leases
10. Loan Application Form – of course, you cannot apply for a business loan without filling out a loan application form!

Once you’ve prepared all of these, you’re now ready to sign up for a business loan. Take note of the number of years you have in order to completely pay your loan, as well as the interest rate and penalties if you don’t pay on time.

Being a responsible businessman is also as important as being a responsible borrower. So, prepare well for all your business endeavors.