What Is a Small Business Loan Application?
Small Business Loan Applications Explained
A small business loan application is a form that small business owners fill out when they're ready to ask for a loan.
Learn more about these forms, and what information you may be required to supply when you fill one out.
What Is a Small Business Loan Application?
If you are planning to start your own small business, or already own one, it's likely that you'll need to raise capital for additional cash flow at some point. A common way of doing this is to secure a business loan from a bank, the government, or other lending institution.
To secure financing for your business, you'll need to fill out a small business loan application. This form provides the necessary information to the lending institution about your business and your finances so that they can make a decision regarding your loan.
Who Uses a Small Business Loan Application?
Small business owners are the usual filers of loan applications, but requirements may vary according to business structure. For example, the U.S. Small Business Administration (SBA) requires the following entities to fill out a loan for its popular 7(a) Loan program:
- For a sole proprietorship: the sole proprietor
- For partnerships: all general partners, plus any limited partners who own more than 20%
- For corporations: each officer and director, plus every owner with more than 20% equity
- For limited liability companies (LLCs): each officer, director, and managing member, plus any member with more than 20% equity
- Anyone tasked by the business with managing day-to-day operations
- Anyone who may be guaranteeing the loan
Banks, credit unions, online lending marketplaces, microlenders, and government agencies such as the SBA all may use small business loan application forms when deciding whether to extend a loan to a small business.
Types of Small Business Loan Applications
There are different types of small business loan applications. First, you'll either fill out an application form on paper, or you may fill it out electronically online. The information required will be the same.
Then, the loan application you fill out may vary depending on the type of small business loan you are trying to access:
- SBA loans, which include the standard SBA 7(a) Loan, 7(a) Small Loan, SBA Express, Export Express, Export Working Capital, International Trade, Veterans Advantage, CAPLines, SBA Microloans, and 504 Loan
- Bank or commercial small business loans
- Commercial real estate loan
- Small business auto loan
- Equipment loans
- Secured line of credit
- Secured business loan
- Unsecured line of credit
- Unsecured term loan
- Health care practice loans
- Merchant cash advance
- Accounts receivable financing
How to Fill Out a Small Business Loan Application
When you are ready to apply for a small business loan and fill out the application, be prepared with information about yourself and your business.
You'll likely be asked about the following:
- Business name and address
- Owner (or member, director, partner, or sole proprietor) name and address
- Phone number
- Date of birth
- Social Security number
- Business structure (for example, LLC or partnership)
- Ownership distribution (list of stockholders' names and percentage of equity)
- Nature of business
- Year established
- Number of employees
- Whether you have an existing account at this bank
You'll also likely be asked financial information about your business, such as:
- Type of loan requested (for example, line of credit, term loan, or real estate)
- Amount of loan
- Specific loan purpose (for example, to finance an equipment purchase, or to refinance existing debts)
- Collateral, if any
- Loan guarantors, if any
You may be required to provide financial statements such as:
- Profit and Loss statements
- Balance sheets
- Federal tax returns for the business
- Federal tax returns for each principal owner of the business
- Personal financial statements
- Organizational papers, such as articles of incorporation
Be prepared to answer questions about your future plans for the business as well, including projections or market analysis, as well as your own business background or management experience.
Where to Get a Small Business Loan Application
To obtain a small business loan application, begin by deciding which kind of loan you'd like to pursue. Research what you need in order to apply, including a specific business plan and a clear use for the funds. Avoid common mistakes, such as presenting incomplete financial statements or failing to shop around for a lender. When you do find a lender, vet them thoroughly to make sure they're a good fit for your situation and credit rating.
Finally, approach the institution or lender, either in person at a branch office or online, to request the loan application form.
- A small business loan application is used whenever a small business owner wants to take out a loan. It tells the bank or lending institution information about the business owner and their business finances.
- A small business loan application might be filled out in person on paper, or done electronically online.
- Small business loan applications generally require detailed information about the business, its financials, its prospects and plans, and other pertinent facts about the business and its money.