Joe Johnson, Ph.D.
Entrepreneur. Investor. Startup Expert.

What You Need

Any loan you evaluate will require its own specific set of documents, however, there are several items applicable to every loan application. Before applying, gather these documents and make an honest appraisal of your situation. This will help you to determine which loan products are the best fit for your situation or whether you should consider alternate funding sources.

Credit Reports
Before applying for a loan or other funding source, you’ll want to know where your credit stands. You’re probably familiar with the three major credit reporting agencies: TransUnion, Experian, and Equifax. Each of these agencies is required to provide consumers with one free report every calendar year. Take advantage of this offer and ensure that the information being provided about you to lenders is accurate. If there are any mistakes, now is the time to initiate a dispute and have them addressed.

Some entrepreneurs are surprised to learn that their businesses also have a credit report. Experian, Equifax, and Dun & Bradstreet reports provide a snapshot of a company’s financial health. Understanding the content of your business credit report can give you some insight into how a bank or other lender might judge your business. If you see any errors, have them fixed before applying for a loan. If your business’ credit report is sub-optimal, you may want to consider funding options beyond the strictures of a traditional bank loan.

Business Plan
Many banks require that a small business owner applying for a loan have a business plan. Some may even have specific requirements as to its contents. Look over your plan (you do have one, right?), update it with your most recent information, and verify that it meets the specific requirements of any of the loans for which you’re considering applying.

A lender will be especially interested in your balance sheet and your profit & loss statements. They want to see how you handle money and whether your business is profitable. In addition, lenders are interested in who’ll be handling the loan and in how it’s likely to be utilized.

Your résumé shows your experience and gives banks an insight into your character and knowledge. It can aid in illustrating the path you’ve taken to arrive at your present situation and in demonstrating your dedication to being successful.

If your résumé is already part of your business plan, you’re one step ahead. Include the résumés of everyone in a leadership role and you’ll be well on your way to a complete application.

Tax Returns (at least 3 years’ worth)
Your tax returns show the financial health of your business. Many banks require at least three years of returns. Prepare to show both personal and business income tax returns. If your business is currently doing better than the last tax return shows, consider adding monthly or quarterly earnings reports to illustrate that new growth.

Bank Statements (personal and business for the past year)
Bank statements verify your business spending habits and tax information. They paint a picture of your financial health and help to reassure lenders. Many lenders like to see a year’s worth of bank statements for both personal and business accounts.

Business Licenses, Insurance Documents, Contracts, Etc.
Depending on the nature of your business, you may also need to provide copies of relevant business licenses, proof of insurance, or client contracts. These documents establish your business as being both reputable and dependable. Lending money can be a risky business. Any documents that you can provide to illustrate your ability to repay a loan can go a long way toward mitigating those risks and convincing a bank officer to take a chance on your business.

With these documents in hand, you’ll be prepared to apply for a loan at a wide range of financial institutions. Chances are great that there will be additional proprietary forms to fill out, but having these documents readily accessible will make the entire process simpler and, to a degree, less painful. Make an appointment with your preferred bank or SBA-lender to discuss their specific application process and get the ball rolling.


In 2011, the SBA backed $9 billion in 7(a) loans. In 2015, they only backed $6 billion. While the past few years have shown an increase in small business lending, the numbers are still lower than before the recession. Whether this is due to wiser borrowing on the part of small business owners or reticence on the part of bankers is debatable. However, to ensure success, you’ll need to be wise about both what you’re seeking and from whom.

The National Small Business Association 2016 Mid-Year Economic Report shows that about one-third of small businesses utilized bank or SBA loans within the past year to meet their capital needs. Many of these businesses used this capital to grow. Unfortunately, 41% reported that they were unable to secure the funding they needed. The reason for this inability is not stated, however, because of the low rate of lending, conservative banking decisions may be the cause. Put yourself in the best position by ensuring that your application is complete, that you’re asking for a reasonable amount of money for an eligible use, and that you’re applying at a bank which originates the type of loan you need in the amount you require. For example, some banks may not lend smaller amounts. In that situation, a microloan from a community organization may be more appropriate (and achievable). Being aware of the various options can help to ensure that you spend your time working with the organizations most likely to want your business.

Your likelihood of success in obtaining a bank loan will depend on numerous factors, including where you apply. Increase your chances by setting consultation appointments with different banks and learning more about their expectations of applicants, the terms they offer, and the sort of businesses to which they’re actively making new loans.

Whichever funding route you choose, be sure to ask detailed questions, fully understand the answers, and read every document you sign. Seeking funding can be stressful, but it’s often a necessary part of starting or expanding a business. By reading this article, you’ve already taken the first step toward obtaining a business loan: educating yourself. Increase your likelihood of success by continuing to learn about the specific loan(s) for which you’re applying and the relevant lenders in your area.

Professional Advice

It’s an extremely good idea to seek expert counsel, both legal and financial, prior to signing loan documents committing not only your business, but (most likely) your personal assets and credit score to a new loan. Having such advisors available to you, whether on retainer or otherwise (possibly just lawyer or accountant friends willing to take your calls and/or review documents in exchange for lunch) will prove invaluable over the long haul.

About the Author

Dr. Joe Johnson is an entrepreneur, investor, and startup expert. He is the founder and principal of GoodField Investments and the GoodField Foundation (

Joe has a Ph.D. in Entrepreneurial Leadership and an MBA. He is the author of the upcoming book on The Science of Why Most Entrepreneurs Fail and Some Succeed.

Most importantly, he is the incredibly blessed husband of one amazing wife and father of six wonderful children. He resides in Bradenton, Florida. For more information on Dr. Johnson and his work, go to