What Questions Will Prospective Lenders Have Before Loaning My Business Money?

Be prepared by considering the answers you could give to the following questions lenders are likely to ask about your business and your intentions.

Lenders will likely ask the following questions:

1. How will you use the loan proceeds?
2. How will you repay the loan?
3. Does your business have the ability to make the payments required under the loan?
4. How much do you want?
5. Can you put up any collateral?
6. Are you willing to put up personal guarantees?

Also, the lenders will typically ask for the following documents:

1. Your company's incorporation or other organization documents
2. Your company's tax returns for the last 3 years
3. Your profit and loss statements and balance sheets for the last 3 years
4. Any business plan
5. A description of any litigation or bankruptcy filings
6. A completed loan application
7. Your Board of Directors minutes approving the borrowing (for corporations)

One way to improve your chances of getting your loan improved (and to make sure you have good answers to all these questions) is to prepare a written proposal. Read our for "Elements of Successful Small Business Loan Application" guidance.

Find more tips and advice on equity funding for small and growing businesses at AllBusiness.com.

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