Business Loans Buyer's Guide
Preparing for loan applications
Obtaining a commercial loan requires a great deal of legwork and preparation. These are some
key documents you should have ready to present to the lending institution:
- your company's financial statements including balance sheet, income statement, and tax returns
- your personal financial statements and tax returns for the past three years
- monthly cash flow projections based on obtaining the loan
- thorough and detailed business plan
- specific details of how the loan will be used
- management profile
The organization and timely preparation of these documents will be a reflection of your business,
so pay close attention to the presentation.
Note that one of the most common reasons businesses get turned down for commercial loans is
that their accounting is sloppy or deceptive. Reducing your reported income is one way to avoid
taxes, but it can also make your business look like a horrible candidate for a loan. Make sure
your financial documents are reviewed by a qualified accountant before you take them to lenders.
Are you classified as an undesirable loan?
Even before you complete an application, you may be fighting a losing battle: some types of businesses
are deemed "undesirable" by lenders. Addressing this issue will require a great deal of tact,
but finding out the answer can save a lot of time and energy for both you and the potential
lending institution. You'll have to go directly to the lender and ask whether your industry
is classified as an undesirable loan.
This list can vary from one institution to the next, and can be based on risk factors (industries
in decline or subject to strict legal controls) or ethical concerns (adult businesses, firearms,
or alcohol/tobacco.) If your industry is classified as undesirable, you're going to have a very
difficult time obtaining a loan.
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- Accountants and Accounting Firms
- Amusement and Theme Parks
- Apartment Building Owner
- Architects & Engineers
- Assisted Living Facilities
- Attorneys, Lawyers, and Law Firms
- Audiologists
- Auto Repair Shops / Automotive Services
- Bakeries and Bakery Shops
- Bar / Tavern / Nightclub
- Beauty Salon
- Bed and Breakfast Inns
- Bicycle Shops and Bike Stores
- Body Repair Shops
- Bookstores
- Building Supplies Stores and Home Centers
- Car Dealership
- Car Wash and Auto Detailing
- Card and Gift Shops and Stores
- Carpet and Floor Covering Stores
- Casinos
- Chiropractors
- Clothing Stores
- Coffee Shops and Coffeehouses
- College Stores and Bookstores
- Colleges, Universities, and Professional Schools
- Concerts & Festival
- Convenience Stores
- Cosmetics, Beauty Supplies, and Perfume Stores
- Country Clubs
- Day Care, Nursery & School
- Dentists and Dental Practices
- Dry Cleaners
- Florists and Flower Shops
- Furniture Stores
- Gas Stations and Truck Stops
- Glass Stores and Shops
- Golf Courses and Driving Ranges
- Grocery Stores and Supermarkets
- Hair Salons, Beauty Salons, and Barber Shops
- Hardware Stores
- Health Clubs and Fitness Centers
- Health Food, Vitamin, and Supplement Stores
- Hobby, Arts, and Crafts Stores
- Home Furnishings Stores
- Hotels and Motels
- Household Appliance Stores
- Janitorial & Building Maintenance
- Jewelry Stores and Jewelers
- Lawn and Garden Supplies Stores
- Movie Theaters and Cinemas
- Movie, DVD, and Video Rental Stores
- Museum Shops and Stores
- Museums
- Music and Record Stores
- Oil Change and Fast Lube Services
- Optometrists
- Paint and Wallpaper Stores
- Pet Shops and Stores
- Photography / Videography
- Physical Therapists
- Physicians, and Medical Practices
- Podiatrists
- Real Estate Professional
- Restaurants, Sandwich Shops, and Cafes
- Retail Stores
- Shoe Stores and Shops / Footwear Retailers
- Ski and Snowboard Shops and Stores
- Ski Resorts and Areas
- Spa Resorts and Day Spas
- Sporting Goods Stores
- Tanning Salons
- Tattoo & Body Piercing
- Veterinary & Animal Services
- Wineries
- Zoos, Aquariums, and Botanical Gardens
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