Every lender has its own business loan requirements, but the general gist is that lenders want to see some form of personal and business income tax returns. They also typically want to see business bank statements that show when money comes in and goes out, and they may ask for collateral—assets they can legally seize if a borrower can’t make payments.

What is a business?

A business is any entity that provides goods and services in exchange for money. A business can be for profit, non-profit or even just a side hustle. The key is that the entity seeks profits from its activities.

Lenders usually want to see some form of a business plan with a loan application. The format varies, but typically includes an executive summary, business description, market information, management plans and financial projections.

Businesses can range in size from small sole proprietorships to massive multinational corporations that operate in multiple industries around the world. They can also be organized as for-profit entities or non-profits that support a charitable cause or social mission. The majority of businesses, however, are for-profit and make a profit on the sale of their products and services.

How long has your business been in business?

Lenders want to see a history of how well your business has performed. Depending on the type of loan and lender, this can include things like revenue, profitability and cash flow trends. Whether it’s for traditional brick-and-mortar bank loans or online business loans, most lenders will require at least two years in business.

In addition to your company’s financial history, most lenders will also look at the owner’s personal credit profile and score to make sure that they are able to cover repayment if necessary. They may also ask for proof of ownership, such as a lease agreement or tax returns. Many lenders also request a business plan so they can better understand how you will use the funds and what your growth goals are.

What is your personal credit score?

Whether you’re looking to start a business or expand an existing one, it’s important to have the financial resources to ensure your company’s success. That means having a solid personal credit score.

Lenders take a close look at your personal credit history to evaluate your risk as a borrower. They consider your payment history, amount owed and other factors to determine how responsible you are with your finances.

Most traditional lenders require a multi-page loan application, three years of financial statements and a business plan. But independent financing partners offer more flexibility and can provide small-business loans to entrepreneurs with a variety of financial backgrounds. They may also request a credit report from the business, but it won’t have the same impact as a lender pulling your personal credit.

What is your business’s industry?

A business industry analysis is an important part of any business plan. It provides statistics about your business’s products or services, as well as its market potential. This section should include information about your industry on a local, provincial, national and/or global basis. It should also explain the size of your industry and how it is expected to grow in the future, based on national economic trends. This is helpful in determining what type of loans your business may be eligible for.

How much do you need to borrow?

When you’re applying for a business loan, lenders need to know that you’ll be able to afford your loan payments. That’s why they’ll look at your business’s financial statements, like profit and loss reports and balance sheets.

Many lenders also require you to pledge collateral, such as your accounts receivable or equipment, which they can seize if you default on the loan. Lenders may also want you to provide a well-written business plan that details how you’ll use the loan and how you expect to repay it.

Taking the time to prepare for the business loan application process can help you get your business approved faster. By gathering key information and meeting lender requirements, you can save time and money on your loan application.