Information to Include About your Small Business

Management Experience:
Include resumes of all owners and top level management members.

Personal Financial Statements:
The SBA requires the submissions of financial statements for all principal owners and guarantors. Principal owners own 20%of the small business, or more. Financial statements should be from within the past 90 days. Also, include a copy of last year’s federal income tax return with the financial statement. Be prepared to explain trends in your financial statements. You want to be able to explain the “story” behind any sudden drops—or sudden gains. You may even consider explaining these trends in an introductory paragraph preceding your financial statements.

Loan Repayment:
Provide a brief written statement indicating how your small business intends to repay the loan. Include repayment sources and time requirements. Also include cash-flow schedules, budgets, and other appropriate information to support your claim. In the end, loan repayment will be negotiated between you and the lender; however, prospective lenders will still want to see that you are capable of thinking in terms of repayment.

Projections:
Provide a projection of future operations for at least a year or until positive cash flow can be shown. Include earnings, expenses, and reasoning for the estimates you have made. Make these projections in profit and loss format. If your estimates deviate from trend or industry standards, explain. Justify your projected figures with clear explanations. Be prepared for questions from the prospective lender about worst-case scenarios; for example, what if some of your projections don’t come true?

Collateral:
Few financial institutions will provide loans not based on collateral. This means you must list assets to be held as collateral, including real property. All loans should have at least two identifiable sources of repayment. Source One is ordinarily cash flow generated from profit made by the business. Source Two is usually collateral guaranteed to secure the loan.

For Existing Businesses Only:
Provide financial statements for the last three years or more, plus a current dated statement from within the past 90 days. Include:

• balance sheets
• profit and loss statements
• reconciliation of net worth
• information about accounts payable and accounts receivables
• a schedule of term debt

If you’re including other balance sheets, be sure to explain what they are, and their significance.

For Proposed Businesses Only:
Provide a pro-forma balance sheet detailing the sources and uses of:

• equity
• borrowed funds

If Applicable, Also Include the Following:

• Lease (copies of proposal)
• Franchise Agreement
• Purchase Agreement
• Articles of Incorporation
• Plans, Specifications
• Copies of Licenses
• Letters of Reference
• Letters of Intent
• Contracts
• Partnership Agreement
• Literature detailing your products or services.
• Letters from suppliers, satisfied customers and other business references.