Application checklist

Have you done your homework and shopped around?

Shop around, your existing bank may not be the best for your business and may not offer you a loan. Do your research, talk to other people in business, look at websites and gain plenty of background information about what’s on offer.

Most retail banks offer small business loans. Make sure you shop around to find the loan that’s right for your business and consider whether it makes sense to consolidate all your business with one bank to get the benefits of a package, or go with different providers for different products. You may also consider visiting a finance broker, as they can help evaluate the options of many lenders.

Have you prepared a business case?

Remember that no one knows your business like you do, so a business case is vital for any potential lender to assess your application effectively. For more information on how to prepare a business case or for a template for documenting a business case, visit our Resources section.

Do you have a personal guarantee?

It is likely that you will be asked to provide a personal guarantee when borrowing money for a small business. This means that you are willing to pledge your personal assets to protect the lender where you are unable to re-pay the loan. If your business is a registered company, then the bank is likely to ask for guarantees from all directors.

Have you included all information?

Make sure you know what information is required. A loan application should include:

• Executive summary
• Introduction
• Statement of purpose
• Business plan
• Financial forecasts
• Historical business financial statements
• Personal information

Do you plan on presenting the application?

You should meet with the lender and be prepared to discuss yourself, your business and your financial needs. Your bank should be seen as a partner and add value. Meeting with them may well be the first step in developing an ongoing relationship that will foster future growth for your business.

Establish the expectations of the lender before you meet – research the institution’s website or contact them to ask for a checklist of the information that will be required.

Do you understand the terms and conditions?

When you take out a loan, there will be certain obligations that you will need to adhere to. Before you accept a loan offer, the bank will give you a plain English document clearly setting out the key general terms and conditions of the loan. Make sure that you understand what will be required from you and your business before you accept the loan offer. If you don’t understand the legal terminology, seek help from an adviser.

Do you know what to do if you are unsuccessful?

After the bank has received all the information requested, they will tell you how long a decision is likely to take.

If you are unsuccessful with your loan application, ask your bank why. This will help you understand how the bank views your application and may assist you in the future.