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How to Apply for Debt Financing

Industry information, News



Once you’ve determined which type of debt financing to pursue, it’s finally time to apply for your loan product. The complexity and length of the application process varies widely depending on your lender and loan product. However, all lending applications are designed to answer the same question: Will you be able to repay your business loan?

Documents You’ll Need

Answering that question to the satisfaction of your lender can require a lot of documentation—so the more organized you are beforehand, the easier it will be to complete your loan application.

Not every one of these documents will apply for every business or be needed for every loan product—but gathering as many of these documents as possible beforehand will make your life much easier when the time comes to actually complete your loan application.


First, your lender will need to be assured of the legitimacy of your business. Here are a few documents you’ll want to have on hand to prove that your business is real, and that you have the authority to apply for a loan in the business’s name:

  • Business License – To obtain a loan, your business needs to meet all federal, state, and local licensing requirements. In addition to basic business registration, your business may also require other industry-specific licensing.
  • Proof of Business Ownership – Only the owner of a business has the authority to apply for a business loan, so you’ll need to prove that you own your business. If your business has multiple owners, you’ll need your partner’s written permission to apply for a business loan.
  • Franchise Agreement – If your business is a franchise, you’ll need a copy of the FFA agreement you signed with the franchisor.
  • Business Plan – While not always required, having a solid business plan shows lenders that you are serious about your business, and that you have a vision and blueprint for your business’s future.


In order to make money and pay back your loan, your business needs a solid customer base. Especially if you run an invoice-based service business, gather these documents for use in your loan application:

  • Customer List – Who are your customers? A list with names, addresses, contacts, total amount invoiced, and any other database information you have is very helpful. Any reputable lender will never contact your customers without your explicit permission.
  • Accounts Receivables Aging Statement – Invoice-based businesses rely heavily on their receivables to maintain good cash flow. Provide your most recent AR aging statement to show how quickly your customers pay you as evidence of your business’s cash flow.
  • Credit Card Processing Statements – If you operate a retail business, your credit card processing statements will serve as concrete proof of yours sales volume. Gather your processing statements for the last 3-6 months as evidence of your sales.


Your business’s assets, liabilities, revenue, and cash flow paint a picture of the overall health of your business, which in turn shows your ability to make payments on your loan. Lenders will have questions about both your personal and business finances, which you can answer with the following documents:

  • Personal Tax Return – Especially if you have a relatively new business, lenders may ask to see your most recent tax return.
  • Business Tax Returns – If you’ve been in business for awhile, have your last 2-3 years’ business tax returns on hand to show your long-term revenue history.
  • Balance Sheets – Most brokers recommend having accurate balance sheets on hand, both for your business’ year to date operations, and for the two prior fiscal years. If you use accounting software like Quickbooks, you should be able to pull your balance sheets easily—or use our free balance sheet template to create your own.
  • Profit & Loss Statements – This shows your company’s revenue and expenses. Include both a year-to-date P&L, updated within the last 60 days, and total profit and loss statements for the last two years.
  • Sales Forecast – Particularly if you have a newer business or your most recent profit and loss statements are less than stellar, providing an well-researched sales forecast may help to tip the scales in your favor.
  • Business Banking Statements – Provide at least four months’ worth of banking statements, six if you have them, and 12 if your business is seasonal. For each month, remember to include all pages of the bank statements, not just the first.


Finally, you’ll need to disclose to the lender any other outstanding debts that your business is responsible for. In addition to other business loans, this may include rent payments on your retail or office space, or payments on business credit cards.

Gather these documents as evidence of your business’s other debts or liabilities:

  • Most Recent Accounts Payable Statement – Your accounts payable statement breaks down the accounts payable section of your balance sheet into even more information about who and how much you owe. If you use Quickbooks, you can pull accounts payable reports under Vendors & Payable Reports. Otherwise, you can create an excel spreadsheet similar to your AR aging report.
  • Business Debt Schedule – A business debt schedule shows all of your company’s outstanding loan and credit amounts and monthly payments. If you don’t already have one, use our business debt schedule template to create a payment schedule for your business.

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