How to Prepare Loan Documents That Get Approved

Assemble bank-ready loan documents with the specific financials, projections, and documentation that lenders require for approval.

1. Compile three years of complete financial statements. Provide profit & loss statements, balance sheets, and cash flow statements for the past 36 months. Include tax returns (business and personal). Lenders want to see consistent revenue trends and debt service coverage ratios above 1.25x. Bank statements for the last 12 months complete the financial picture.
2. Build realistic 12-month financial projections. Create month-by-month P&L and cash flow projections showing how you'll service the new debt. Include assumptions for revenue growth, operating expenses, and debt payments. Most lenders reject projections showing revenue growth above 20% without documented contracts or purchase orders supporting the increase.
3. Document collateral and personal guarantees. List all assets securing the loan with current appraisals or valuations. Include equipment lists, real estate appraisals, and inventory valuations. Prepare personal financial statements for all guarantors showing liquid assets, real estate holdings, and existing debt obligations.
4. Draft a specific use of funds statement. Detail exactly how loan proceeds will be deployed with dollar amounts and timing. Equipment purchases need vendor quotes. Working capital needs should tie to seasonal cash flow patterns. Lenders reject vague requests for 'general business purposes' or 'growth capital.'
5. Include business plan and market documentation. Provide a concise business overview covering your market position, competitive advantages, and management team experience. Include customer concentration analysis if any single customer represents more than 15% of revenue. Add contracts, leases, and key vendor agreements that support ongoing operations.