Money Talks, So Should You

Q&A: What does a bank request for a new business loan?

Steve Doster
by Steve Doster, The Garrett Network  (@dosterfinancial)

Oh, banks don’t need much to loan money to a new business. The rights to your first born child should be sufficient. However, they stopped taking teenagers due to the high default rate of parents wanting to get rid of them.  

All kidding aside, lenders want to see two ways to repay your loan: cash flow and collateral. A new business doesn’t have cash flow and you need a loan because you don’t have the collateral to fully self-fund. Ironic, I know.

READ: Small-business disaster-loan demand soars after Sandy

Luckily, there is the Small Business Administration, or SBA. Lenders are more likely to give your new business a loan that is backed by the SBA. Not all banks do SBA loans, so you’ll need to look around.

The list is too long to go through all of the information that is required.

A few of the biggies are a business plan, credit report, resumé, and financial statements.

Find a more extensive list here.

Good luck!

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Steve is president and founder of Doster Financial Planning, a commission-free firm based on San Diego, CA. He is a CERTIFIED FINANCIAL PLANNER™ professional with an MBA fom Arizona State University and a BS in mechanical engineering from the University of Arizona. Steve is proud to say he doesn’t sell financial products or earn commissions on the advice he provides to clients. His primary goal is to educate people to understand and select the best ways to achieve their unique financial future.