With the end of the year quickly approaching, it is important for small business owners to plan ahead for 2016. With each new year comes new expectations and business goals, which often require more significant investment in time and money on the part of the business owner.
One resolution that many small business owners have as they enter the new year, is to apply for financing to allow them to bring their growth potential to the next level. To do so, business owners must first assemble and organize their financials. This can be a tedious process. However, it will go a long way in allowing them to take steps forward in the development of their business.
Having organized financials is a critical step that many small and mid-sized business owners do not anticipate prior to applying for a business loan. As an online lender specializing in loans to small and mid-sized businesses, The Credit Junction has compiled the following list as the four essential documents to sort out before applying for a loan. These documents are needed across the industry, and not just with applications to The Credit Junction. See the list below:
1. A Complete Income Statement and Balance Sheet for the last two years, and Year-To-Date (YTD) Financials
These are the most crucial documents to keep up to date. If you own a company that has not been in business for two years, do not worry. The key is just to ensure that you have complete financials for as much of the past two years as possible. YTD financials are important for a lender to gauge how your business has been growing over time.
2. Company-Prepared Projections
All lenders want their financing to propel a company into a higher growth period. With this in mind, lenders want to see where a potential client’s ambitions lie, which can easily be deciphered through a projection. Forward planning is always important to have in mind for a business owner, regardless.
3. Business Tax Returns (Last 2 years available)
Lenders use the tax returns as a means to verify that the company is in a healthy financial state. Ensure that your tax returns match the rest of your financials as closely as possible.
4. Bank Statements (6-12 Months)
This is quite a straightforward financial to ensure that you are on top of. Not only is it important to keep a detailed log of all of your banking activity as a small business owner, but it is also important to be able to pass this information along when applying for financing, as lenders want to verify that you are making your payments on time.
Of course, there are always a few more forms to fill out, but being on top of these four sets of documents will put you ahead of the curve and bring you that much closer to financing your business with working capital.
As always, The Credit Junction is here to do all in its power make your lending process faster, easier, and more transparent.