FAQ: What Financial Info Do Lenders Look For?

What Financial Info Do Lenders Look For?

When you apply for a business loan, lenders look for proof that your company can repay what it borrows. This typically means they’ll request detailed Loan Docs showing your business’s income, expenses, debts, assets, and credit history. Expect to provide financial statements, tax returns, and documentation that demonstrates stable cash flow and responsible money management.

Why This Question Matters

Whether you’re applying for a small business loan, line of credit, or SBA-backed financing, lenders are assessing risk. They want to know:

• Does your business generate enough consistent income?

• Do you manage your debt responsibly?

• How strong is your Business Credit?
  

Understanding what information they’ll review helps you prepare in advance, avoid delays, and improve your odds of approval. Even profitable businesses can face rejection if their records are incomplete or disorganized.

The Key Financial Documents Lenders Review

Most lenders — including banks, credit unions, and SBA lenders — will ask for:

1. Tax Returns (Business and Personal)

Usually the last two to three years. These verify your income and tax compliance.

2. Financial Statements

• Profit & Loss Statement – Shows your revenues, expenses, and profit margins.

• Balance Sheet – Lists your assets, liabilities, and owner’s equity.

• Cash Flow Statement – Demonstrates your ability to meet debt obligations.
  

3. Bank Statements

Typically the past 3–6 months to confirm actual cash flow and spending patterns.

4. Debt Schedule and Loan History

Details on current loans, lines of credit, or leases, showing how you handle repayment.

5. Business Credit Reports

Lenders often check your Business Credit through agencies like Dun & Bradstreet, Experian, or Equifax.

6. Accounts Receivable / Payable Aging Reports

These help lenders evaluate whether your customers pay on time and how you manage supplier relationships.

7. Business Plan or Use of Funds Statement

If you’re seeking financing for growth or expansion, lenders may ask for a short narrative explaining how the funds will be used and how they’ll generate returns.

For SBA loans, the SBA Standard Operating Procedure (SOP 50 10 7.1) outlines additional requirements, such as personal financial statements and collateral documentation. You can review these standards at SBA.gov.

Related Questions Clients Often Ask

• “Do lenders care more about personal or business credit?”

• “What’s the minimum revenue needed for a business loan?”

• “Can I get approved if my books aren’t perfect?”

• “What counts as acceptable collateral?”

• “Do I need audited financial statements?”

  
  

These questions all come back to the same point: lenders value accuracy, consistency, and transparency in your financial Info / records.

Actionable Tips to Prepare

1. Keep your books up to date. Accurate bookkeeping is non-negotiable. Learn how to simplify your process with Development Theory's Bookkeeping & Payroll Guide.

2. Separate business and personal finances. Use dedicated accounts to build your Business Credit and make your financial statements cleaner.

3. Review your ratios. Check your debt-to-income, current, and cash flow ratios before applying. Lenders use these to assess financial health.

4. Correct errors early. Dispute inaccurate items on your credit report and fix inconsistencies in your Loan Docs before submission.

5. Document your story. If your numbers took a hit due to seasonal trends, COVID-19, or a one-time expense, explain it clearly in your loan narrative. Lenders value context.

Bottom Line

Getting approved for a loan isn’t just about revenue — it’s about showing lenders a clear, trustworthy picture of your business’s financial health. Organize your Loan Docs, strengthen your Business Credit, and keep your books in order to make every loan application easier and more successful.