Are You Eligible? The Must-Have Documents for Securing a Business Loan

Securing financing is often a crucial step for starting or expanding a small business. Whether you need funding to launch a business, purchase inventory and equipment, move into a larger space, or hire more staff, loans and lines of credit provide access to capital that can help take your company to the next level.

To qualify for a small business loan or line of credit, lenders require documentation that proves you and your business are creditworthy borrowers. By understanding exactly what documents you need to prepare and submit as part of the loan application process, you can increase your chances of securing financing and obtain the funding you need on favorable terms.

This article outlines the key documents lenders look for when evaluating a small business loan application. We’ll cover the personal identification, business formation paperwork, licenses and permits, financial statements, tax returns, and other materials needed to prove you and your company are qualified to receive financing. Having these documents ready in advance will prepare you to take advantage of growth opportunities and smoothly navigate the loan application process. The ability to access capital at critical moments can mean the difference between thriving or merely surviving in today’s competitive marketplace.

Personal Identification

When applying for a business loan, lenders will require personal identification documents to verify your identity and eligibility. The most common forms of ID needed are:

  • Driver’s license – This must be a valid, unexpired government-issued driver’s license with your photo. Make sure the name on your license matches the name on your loan application.

  • Passport – A valid, unexpired passport can serve as identification. As with a driver’s license, the name should match your application.

  • Social Security card – Your social security number is required for the application, so be prepared to present your social security card as well.

  • Permanent resident card – If you are not a U.S. citizen, you will need to provide your permanent resident card (green card) along with your foreign passport.

Bring your original documents, not photocopies. The lender will verify the documents are authentic. You will also need to provide a physical home address, not just a P.O. box, along with your phone number and email address. Having a valid personal ID is a key eligibility requirement when seeking business financing.

Business Formation Documents

If you have formally established your business as an LLC, corporation, nonprofit, or other legal entity, you will need to provide documentation proving the valid formation of the business. This includes:

  • Articles of Incorporation or Organization: This legal document is filed with the state to formally register and establish a corporation or LLC. It outlines key details like the business name, owners/shareholders, registered agent, business purpose, and more.

  • Certificate of Incorporation or Organization: After filing incorporation/organization paperwork, the state issues this official certificate as proof that the business is legally recognized and registered.

  • Operating Agreement: For LLCs, this agreement defines financial and functional decisions like ownership percentages, voting rights, member responsibilities, distribution of profits and losses, etc.

  • Bylaws: Corporations require bylaws to outline operational procedures for the business, like shareholder meetings, voting procedures, electing directors, officer positions, etc.

  • EIN Confirmation Letter: This letter from the IRS provides the federal Employer Identification Number (EIN) assigned to your business for tax and reporting purposes.

  • Business Licenses: If required in your state or municipality, submit copies of licenses obtained to legally operate your business. Common examples include local business licenses, sales tax permits, and food handler permits.

Having these official business formation documents in order proves to the lender that you have taken the proper legal steps to establish and operate your business. It provides validity and demonstrates you are committed to running an accountable, compliant business. Don’t apply for financing without them.

Business Licenses and Permits

To qualify for a small business loan, you’ll need to have the proper licenses and permits required to operate your business legally. This shows lenders that you have taken the necessary steps to establish your business.

The specific licenses and permits you’ll need vary based on location and industry. Some of the most common include:

  • Business license – Also known as an occupational license, this is required by many states, counties, and cities. It authorizes you to conduct business activities within that jurisdiction.

  • Sales tax license – If you plan to sell taxable goods or services, you’ll need a sales tax license. This allows you to legally collect and remit sales tax to the state.

  • Food service permit – For restaurants, caterers, food trucks, etc. This comes from your local health department and indicates you meet food safety standards.

  • Liquor license – Required to serve alcoholic beverages. Regulations and costs vary greatly by state.

  • Trade licenses – For specialized fields like construction, childcare, auto repair, etc. proves you meet industry qualifications.

  • Professional licenses – For regulated professions like lawyers, CPAs, real estate brokers, therapists, etc.

  • Building permits – For remodeling, expansions or new construction. Verifies work meets codes and zoning.

  • Employer Identification Number – Issued by IRS for tax purposes.

Double check that your business has all required licenses and permits before applying for financing. Lenders will ask for copies to verify. Staying properly licensed shows you operate a legal, compliant business.

Business Plan

A comprehensive business plan is crucial for securing business financing from a lender. Your plan provides an overview of your company and serves as the main document to present to potential lenders and investors. Key sections to include in your business plan are:

Executive Summary – This provides a high-level overview of your business, including your mission statement, company description, target market, competitive advantage, financial projections, and funding needs. Keep it to 1-2 pages.

Company Description – Describe your business’s industry, structure, history, location, legal entity status, and ownership details.

Market Analysis – Research your target market and industry trends. Detail your ideal customers and how you’ll market to them. Include a competitive analysis.

Products and Services – Explain your product and service offerings and how they fulfill customer needs better than competitors.

Marketing and Sales Plan – Outline your pricing, distribution, and promotional strategies to reach your target market. Explain how you’ll convert leads into sales.

Operations Plan – Describe your business’s daily operations, suppliers, production, quality control, and customer support processes.

Management Team – Provide bios describing the experience of your key team members and managers. Lenders want to see you have a qualified team.

Financial Plan – Include financial projections (profit/loss, cash flow, balance sheet) for the next 3-5 years. Provide details on your startup and ongoing costs, funding requirements, and expected revenues.

Having a complete business plan demonstrates you have thoroughly planned all aspects of your business. It’s your roadmap for success and shows lenders you are worthy of financing.

Financial Statements

When applying for a business loan, lenders will require both personal and business financial statements to assess your ability to repay the loan.

The main personal financial statements needed are:

  • Personal balance sheet: Lists your assets and liabilities to demonstrate your net worth. This includes assets like your home, retirement accounts, investments, cash savings, and personal property. Liabilities would include your mortgage, credit cards, auto loans, student loans, or other debts.
  • Personal income statement: Documents your income sources and living expenses over a set period, usually monthly or annually. This verifies your ability to make payments on a business loan.

For business financials, lenders will want to see:

  • Business balance sheet: Provides a snapshot of your business’s financial position. It lists assets like cash, accounts receivable, inventory, and equipment. Liabilities include accounts payable, debts, and loans. Your equity is also calculated.
  • Income statement: Shows your revenue, expenses, and net profit or loss over a specific time period. This demonstrates the profitability and sustainability of your business.
  • Cash flow statement: Outlines the money moving in and out of your business from operations, investing activities, and financing. It shows your business’s liquidity.
  • Financial projections: Forward-looking profit and loss statements, balance sheets, and cash flow statements for the next 3-5 years. This illustrates your business’s expected financial future.
  • Providing complete, accurate, and timely financial statements is crucial for securing business financing from lenders. The documents verify your business viability and ability to manage and repay debt.


When applying for a business loan, being well prepared by having all your documentation in order is crucial for loan approval. The key documents needed can be summarized as:

  • Personal identification – This includes a government-issued ID and proof of address to verify your identity. 
  • Business formation records – Depending on your business structure, you’ll need to provide registration documents, articles of incorporation, etc.
  • Licenses and permits – Being properly licensed and permitted legitimizes your business.
  • Business plan – A solid business plan conveys your business goals and how you’ll repay the loan.

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