So, you’ve decided that your business needs some additional finance. You’ve already decided that you want to apply for a business loan and you’ve already put together a comprehensive business plan, including your financial details, and agreed what you will put up as security. But what else will the bank want to see?
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Audited accounts – current and historic
Lenders will want to see your accounts for the last year at least and in some cases going back several years. This includes your profit and loss account and balance sheet. It will not be sufficient for you to send them yourself; they will want to see exactly what has been filed with HMRC.
If you’re unsure about what accounts you need to file and how they should be prepared, the Government provides some guidance. If you don’t feel confident about preparing this yourself, you should look for an accountant who can help.
Personal finances
Lenders will require details about you and your finances for a number of reasons. Firstly, they need to be certain that you are who you say you are and aren’t trying to obtain finance fraudulently. Secondly, they will expect that you are able to put up some kind of personal guarantee for the loan. This tells a lender that you have faith in the business you’re asking them to lend to.
Each set of business and personal finances are different, as are individual circumstances, and it’s worth looking for a lender who will assess your suitability for finance on a case by case basis rather than have a blanket algorithm to make decisions. If you’re looking for commercial loans Northern Ireland companies such as https://www.assetfinanceni.com/Commercial-Loans can help.
Proof of insurance
Not only will a lender want to ensure that your business is insured properly against liability, but they may also expect that each of the guarantors is personally insured against death and in some cases request themselves as first on the pay-out list.
Agreement to meet certain criteria
In some cases, depending on the information you have provided, a lender may put in place certain criteria that need to be met throughout the life of the loan.
Whilst this level of information may seem tedious to prepare it is required to protect both you and the lender.