A Checklist for Getting A Business Loan

A Checklist for Getting A Business Loan
April 15, 2015 Marketing

Ask Lourdes

By Lourdes Cortez

A Checklist for Getting A Business Loan

April 2015 Volume 2  Issue 5

Applying for a business loan can seem like a scary process, however breaking it into manageable pieces and creating a checklist makes it seem less daunting. There are a number of documents that should be on your list before you walk into a financial institution. Make sure to include financial statements, income tax returns, a business plan, personal background information and legal documents including contracts and certificates of incorporation (if it applies).

First, you need to provide personal background information. A strong resume should thoroughly represent your business management expertise, experience and professional accomplishments. Include your educational background too as it builds your case as a successful business owner. If there is additional management, outline who they are and what strengths they bring to the company.

Be prepared to thoroughly discuss what the loan will be used for in starting or growing your business. A strong business plan is key and should explain in detail why you want to start or expand your business. Use it to illustrate strategic plans, projected spending and operational costs, generated or projected revenue and profits, staffing requirements, and any other details in support of obtaining the loan. The loan officer needs to have a good understanding of what it is you want to accomplish with a loan.

Your business plan is the document that shows the lender that you comprehensively know your business and have gathered sufficient facts and figures supporting your organization’s future success. Your goal is to demonstrate profitability and sales growth. Lastly, sell the plan and your business with passion.

Now it’s time to support your case with financial information for an existing business or projections for a new venture. Documentation should include financial statements such cash flow, accounts receivable and payable, income statements, monthly statements and a balance sheet. For a new business, projections can be created through careful research of similar businesses and examining the current business climate in your industry.

Legal documentation is also necessary in obtaining a business loan. Business licenses and registration, certificates of incorporation, leasing documents (if applicable), franchise agreements (again, if applicable) and contracts you have with both customers /

clients and your suppliers, are among the documents you may need.

Know beforehand which documents you will need in applying for a loan. Each financial institution is different in its required documentation in the loan application.

Still feeling overwhelmed? Don’t worry, you have gotten this far and loan officers will help you navigate the rest of the lending process.

Now it’s in the lender’s hands to make sure you have sufficiently demonstrated the need for a business loan. If there is additional documentation the lender requests, make sure you can give it to them in further building a strong case for getting successfully funded.

Applying for a loan, if you haven’t noticed, mirrors applying for a job. Just like the interview process, it is about vetting and building your case with experience, expertise, credentials, along with facts and figures.

Keep your checklist handy, make sure your business documentation is up to date, align your strategic and business plans to your goals, and you are on your way to applying for a business loan!

Lourdes Cortez, President/CEO of North Jersey Federal Credit Union, hails from Paterson. In 1984, she began her career at North Jersey Federal and served in several roles.  In 2004, she was promoted to VP of Operations and soon thereafter became Senior VP and in 2005 was named President and CEO.

In February 2014, Cortez was appointed to the Board of Trustees of William Paterson University in Wayne, NJ. She also serves on the boards of the Workforce Investment Board of Passaic County, Visions Academy Charter School in Newark, and as President of the Board of the Boys and Girls Club of Paterson and Passaic. Cortez is the chairperson for the North Jersey Federal Credit Union Foundation and assistant treasurer for the Board of Directors of Executive Women of NJ.  She has volunteered for numerous organizations including La Casa De Don Pedro, the March of Dimes, Eva’s Village in Paterson, the United Way of Passaic County and the American Cancer Society.

As the first Latina CEO of a credit union in New Jersey, Cortez has been honored by NJ Biz magazine, which named her one of the “Best 50 Women in Business” in New Jersey. Other awards include: the North Jersey Regional Chamber of Commerce, 2010 Star Award in Business, the 2010 Salute to the Policy Makers Award from Executive Women of NJ, and the 2012 Women of Achievement Award from the Girl Scouts of Northern New Jersey.