Checklist: Documents Needed for a Commercial Loan Application

Quick overview

When you apply for a commercial loan, lenders ask for paperwork that shows your business can repay the loan. The checklist below organizes the most commonly required documents, explains why lenders want them, and gives practical tips to speed underwriting. In my practice helping small-business owners prepare loan packages, clients who deliver a complete, well-organized packet move through underwriting faster and often secure better terms.

Why lenders need thorough documentation

Lenders evaluate three core areas: cash flow (ability to repay), collateral (security for the loan), and character (owner credit and experience). Documents let underwriters verify revenue, expenses, ownership, tax compliance, and the value of any collateral. For many loans—especially SBA-backed loans—lenders expect consistent documentation covering the last 2–3 fiscal years and current interim statements (U.S. Small Business Administration guidance; see sba.gov).

Document checklist (what to gather)

Below is a lender-ready checklist grouped by purpose. Where useful, I note common lender expectations and alternatives for startups.

1) Business identification and formation

• Articles of incorporation/organization, partnership agreements, or operating agreement. Lenders must confirm legal ownership and authorized signers.
• Business license(s) and DBA (doing-business-as) filings.
• Employer Identification Number (EIN) verification.

2) Ownership and management documentation

• Current list of owners, percentage ownership, and titles.
• Personal resumes or bios for principal owners and key managers for loans where experience matters (e.g., franchise financing).

3) Financial statements

• Business profit & loss (income) statements for the past 2–3 years. Lenders look for consistent revenue and stable or improving margins.
• Balance sheets for the same period plus a current balance sheet dated within the last 60 days.
• Cash flow statements and cash-flow projections (if requesting term loans or growth capital).
• Interim (most recent) P&L and balance sheet—monthly or quarterly—showing year-to-date performance.

Why this matters: lenders base debt-service coverage ratios and loan sizing on historical and current financials. For SBA loans, accurate P&Ls and balance sheets are essential to qualify and calculate repayment ability (SBA guidance, sba.gov).

4) Tax returns

• Business federal tax returns (Form 1120, 1120S, or 1065) for the last 2–3 years.
• Personal federal tax returns (Form 1040) for all owners with significant ownership—usually the last 2 years.
• If tax returns are unavailable, some lenders accept tax transcripts or bank statements plus a CPA letter; discuss options with your lender early.

5) Personal financial statement(s)

• A signed personal financial statement for each principal/guarantor listing assets, liabilities, and liquid net worth. Lenders use these to assess additional repayment sources and to evaluate guarantees.

6) Credit information

• Business credit report (if available) and personal credit authorization forms so lenders can pull consumer credit reports for owners/guarantors.

7) Accounts receivable and accounts payable aging reports

• AR and AP aging provide a snapshot of working capital, collection performance, and short-term obligations. Lenders use this to assess liquidity and the health of cash flow.

8) Collateral documentation

• Proof of ownership and valuation reports (appraisals, equipment invoices, titles) for real estate, machinery, inventory, or other pledged assets.
• UCC-1 financing statement information for existing liens.
• For real estate, provide deeds, surveys, and a recent property tax bill.

9) Contracts and revenue support

• Major customer contracts, purchase orders, recurring revenue agreements, or lease contracts that demonstrate future cash flow.
• Franchise agreements and franchisor approvals when applicable.

10) Business plan and use-of-proceeds statement

• A concise business plan or investor memo summarizing the business model, market, management team, and 12–36 month financial projections.
• A loan purpose statement that explains precisely how funds will be used (e.g., purchase equipment, refinance debt, expand locations) and the expected impact.

11) Insurance and compliance

• Evidence of business insurance (general liability, property, workers’ comp) and, where relevant, proof of licensing or regulatory compliance for the industry.

12) Miscellaneous legal documents

• Recent leases, vendor agreements, legal judgments, bankruptcy filings (if any), and any environmental reports for property-secured loans.

Special notes for startups and early-stage businesses

Startups often lack 2–3 years of business tax returns and financial history. Lenders will typically substitute:

• Detailed personal financial statements from owners,
• Comprehensive business plan and realistic cash-flow projections, and
• Evidence of capital injections (bank statements showing investor or owner funds).
  Smaller microloan and community lenders can be more flexible; review options such as SBA microloans or community development financial institutions (CDFIs). For SBA-specific programs and flexibility, see FinHelp’s resource on SBA loans.

Timelines and process expectations

The time from application to funding varies widely: some smaller term loans or short-term lines can close in 2–4 weeks when documentation is complete; SBA loans and larger commercial loans generally take 6–12+ weeks because of additional underwriting and guarantee paperwork. Faster closings depend on complete, accurate documents and timely responses to lender questions.

Real-world examples (short)

• Equipment purchase: A landscaping company supplied 3 years of tax returns, current P&L, equipment specs, and vendor quotes; the lender approved a $250,000 equipment loan after verifying cash flow support.
• Expansion loan: A service business provided signed customer contracts and AR aging plus interim financials; this helped win a 5-year term loan with a lower rate because the lender saw predictable revenue streams.

Who should prepare this checklist

• Small-business owners seeking term loans, lines of credit, equipment loans, or commercial mortgages.
• Startups pursuing investor-backed or bank financing—expect to provide more narrative and projections.
• Borrowers pursuing SBA-backed loans—plan for extra documentation and personal guarantees.

Practical tips to reduce delays

• Start early: gather all historical tax returns, current interim statements, and ownership docs before you apply.
• Standardize file naming and include a one-page cover sheet listing submitted documents to speed reviews.
• Use a secure file-sharing folder (e.g., password-protected cloud folder) to provide documents to lenders—label files clearly.
• Have a CPA or financial advisor review statements for inconsistencies. In my experience reviewing hundreds of loan packages, one corrected error (a missing 1099) shortened underwriting by several days.
• Provide explanations for one-off expenses or revenue spikes; lenders prefer context rather than surprises.

Common mistakes and misconceptions

• Sending incomplete tax returns or missing owner signatures.
• Assuming lenders won’t verify statements—many will order tax transcripts and third-party verifications.
• Not updating interim financials—lenders want recent performance, not just year-old statements.
• Ignoring personal credit issues: owners with weak credit may need to provide extra collateral or accept higher rates.

Frequently asked questions

Q: What if my tax returns show losses?
A: Lenders will want a clear explanation and projections showing sustained positive cash flow or other repayment sources (personal assets, investor capital). Some lenders specialize in turnaround financing.

Q: Can I use bank statements instead of tax returns?
A: Some lenders accept bank-statement-only underwriting—commonly used for smaller loans or alternative lenders—but traditional banks and SBA lenders generally require tax returns and formal financial statements.

Q: Do I need audited financials?
A: Most small businesses do not need audited financials. However, larger loans or loans to businesses with complex ownership may require reviewed or audited statements by a CPA.

Internal resources

For related guidance, see our detailed SBA resources:

• SBA Loan overview: SBA Loan
• Closing expectations for guaranteed loans: SBA Loan Closing Process
• Common SBA application mistakes: SBA 7(a) Loan Application: Common Mistakes Small Businesses Make

Authoritative sources and further reading

• U.S. Small Business Administration (SBA): loan programs and documentation guidance — https://www.sba.gov
• Consumer Financial Protection Bureau: small-business borrowing basics — https://www.consumerfinance.gov
• IRS: guidance on tax transcripts and business tax return forms — https://www.irs.gov

Professional disclaimer

This article provides general information about documents commonly required for commercial loan applications. It is educational and not a substitute for personalized advice from a licensed lender, attorney, or financial advisor. Document requirements vary by lender and loan program; always confirm the exact list with your prospective lender.

(Article prepared by a financial content editor with hands-on experience helping more than 500 business owners prepare loan packages.)