5 Essential Financial Documents You Need to Apply for a Business Loan

5 Essential Financial Documents You Need to Apply for a Business Loan

Planning to apply for a business loan? Having specific financial documents ready for your banker or a lender when you submit your loan application can make the loan process smoother and potentially increase your chances of securing financing.

1. A/R Aging Statement

An accounts receivable aging report — also known as an accounts receivable reconciliation — summarizes your outstanding receivables, based on the length of time they’ve gone unpaid. For example, your report might break out the timing of your unpaid invoices like this:

  • Less than 30 days old
  • 31- to 60-days old
  • 61- to 90-days old
  • 91+ days old

An A/R aging report gives lenders one insight into your cash flow and ability to repay a loan. The faster your receivables are paid, the better your cash flow may be.

2. Cash flow statement

Speaking of cash flow, you’ll need to draft a cash flow statement before applying for a loan. This document is a comparison of the cash you have coming in to the business from your receivables, and your payables (meaning what you have going out for expenses), including interest paid on business loans, and business investments.

So why does a lender need a cash flow statement? Similar to the A/R aging report, it’s a way to measure your business’s ability to repay a loan. A healthy cash flow may put your business at lower risk of default.

3. Profit and loss statement

The primary purpose of a profit and loss statement (P&L) is to examine your business’s net income or earnings. Your profit is the amount left over from your total revenue after operating expenses, taxes, interest paid on business debt and depreciation, and amortization of business assets is deducted.

A P&L statement can show you and your lender how your profits have trended over time. A business that’s consistently profitable, for example, may be more likely to be considered financially sound and equipped to repay a loan.

4. Balance sheet

Profit and loss statements and balance sheets sometimes overlap, but they serve different purposes. A P&L statement tracks your financial performance over a set time frame; your balance sheet offers a snapshot of your business’s financial standing at one specific point in time.

A balance sheet measures three things:

  1. Your business assets
  2. Your business liabilities
  3. Your ownership equity

When applying for a loan, lenders may review your balance sheet to gauge how easily you can meet your financial obligations in the short-term.

5. Tax returns

Last but not least, lenders will ask to see your business tax returns from the previous year. In some cases, they may ask for several years’ worth of returns.

Lenders use your tax returns to back up the information you’ve supplied through your other financial documents. They can see – at a glance – your business income and deductible expenses, then compare that to the numbers on your cash flow statement, balance sheet and profit and loss statement.

Together, these five documents give lenders a holistic picture of your business’s financial health, and being diligent about preparing them can pay off once you’re ready to apply for a loan.


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Let’s get you the financing you need to grow your business. Whether you’re looking to expand, purchase equipment, fulfill an order or stabilize your cash flow, we can get you the right type of financing for your needs. If you’re still not sure which type of financing is right for you, you can use our matching tool or give us a call at (800) 780-7133 to speak with one of our financing specialists.

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