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Bank Loan Documentation

The process of applying for a loan involves the collection and submission of a large amount of documentation about your business and yourself. The documents required usually depends upon the purpose of the loan, and whether your business is a startup or an already-existing company.


A bank will typically request, at a minimum, the following documentation for a startup business:

  • a personal financial statement (usually lender's own form) and personal federal income tax returns (one to three years)
  • projected startup cost estimates
  • projected balance sheets and income statements for at least two years
  • projected cash flow statement for at least the first 12 months
  • evidence of ownership interests in assets (e.g., leases, contracts) and collateral
  • a business plan that includes a narrative explaining the specific use for the requested funds, how the money will assist the business, and how the borrowed funds will be repaid (repayment sources and duration of repayment period). Any assumptions used in developing your projected financial statements should also be identified. A personal resume, or at least an written explanation of your relevant past business experience, is often submitted with, or in addition to, the business plan. Letters of reference recommending you as a reputable and reliable business person may also help your chances for a loan approval.

Some lenders will also want you to submit a breakeven analysis in the form of a financial statement or a graph. A breakeven analysis shows the point at which the company's expenses will match the sales or service volume. The breakeven point can be expressed in terms of dollars or units sold.

Business Tools

The Business Tools contains a sample personal financial statement that is typical of the kind of documentation you'll need to complete as part of your loan application package.

We also provide Excel spreadsheet templates that allow you to create your own balance sheets, income statements, and cash flow budgets. Because these files are in template form, you can customize them and use them over and over again.

Existing Businesses

For an existing business, you can anticipate a request to produce:

  • income statements and business balance sheets for the past three years
  • projected balance sheets and income statements for two years
  • projected cash flow statements for at least the next 12 months
  • personal and business tax returns for the last three years
  • a business plan (Depending upon the credit history of your business and the purpose for the loan, a business plan for a loan to an existing business may be unnecessary, and a brief narrative of your intentions may suffice.)

Other items to include. Depending upon the specific type of loan you are seeking, you should also address certain issues germane to that loan type. For instance, if money is requested for working capital, your documentation should include: the amount that will be used for accounts payable, along with an accounts receivable aging report to disclose the current amounts overdue 30-60 days or older; the amounts that will be used for inventory and any increase in the number of days that inventory on hand will be held; the amount your cash balances will be increased; and a contingency amount that is equal to at least 10 percent but preferably 25 percent. If money is needed for machinery or equipment, include information that addresses: whether the assets will be immediately available or if a delay is anticipated; the price of the assets and how installation will be performed; whether installation will interfere with current production and the cost of any interruptions. Documentation for an acquisition of land financing should include the real estate's cost, location and size, intended use, and whether any of the land is for future expansion.

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