Business Loan, commercial loan

The Essential Business Loan Checklist for your Business

Business loan checklist is an important step before applying for a business loan application. A checklist can guide you throughout the preparation and application process.

Business loans are quite different and complex in nature.  In contrast, home loans or mortgage loan applications are fairly common. One of the main reason of such uniqueness is its financial complexity and detailed paperwork.

Therefore, if you are thinking to apply for a business loan here is a quick business loan checklist. It will help you in setting up a clear pathway to follow:

Gather your paperwork

Business loans are assessed on a case-by-case basis.

The paperwork and documentation are lengthy and based on lender criteria. Making a list of the required documents needs to be on top of your business loan checklist.

Some of the general documents for business loan applications are as follow:

  • Income and expenses statement,
  • Tax records,
  • Assets and liabilities statement,
  • And essentially any document that can prove the serviceability of the loan.

In many cases lender needs extra information to quantify the risk. A well-written business plan, business profile and exit strategies are also important documents.

A lender needs to understand the nature and risk of your business. So the paperwork needs extra care as every deal is taken on its own merit.

Loan to Value Ratio (LVR)

Usually, the LVR on the business loan is comparatively lower. It generally lies between 50 to 60 per cent. Whereas,  home loans, it is quite flexible. Up to 95 per cent of LVR with LMI capitalisation is obtainable.

Loan repayments are comparatively higher in business loans due to a shorter term. Therefore, a good income or higher equity is important for a successful loan application.

Find a related article: Commercial loan – choosing the right one for your business.


Understand the loan product features and terms

Financial markets are very competitive. Therefore, you will get hundreds of business loan products from different lenders. But the trick is to find out the most suitable one.

So an understanding of the loan products is vital in the business loan checklist.

Usually, an ideal loan refers to a loan with longer-term and doesn’t require ongoing reviews. Therefore, your loan objectivity plays an important role. Then the business loan products and suitability.

A good comparison report on loan products is beneficial. You can have an overview of the loan products.

Another trick is to negotiate the terms and product features. This will help avoid extra onerous tasks.

Let’s take an example. Your lender has offered a good rate with 3-years loan term.  So, you have to renegotiate the rate and fees once your term ends.

Potentially it may cause forking out more application and establishment fees, roughly up to an extra $1500 to $2500 of expenses.

An experienced hand can help you in negotiation.


Talk to a finance broker.

Finance brokers play a major role in business loans.  A broker can give you insights and insider tricks for business loans. A good finance broker will examine your circumstances and plans. And recommend a loan that is right for you.

An experienced finance broker is familiar with the lender’s criteria. So, they can negotiate and arrange a suitable deal.

Most importantly, you can save your time and money, and have peace of mind.

Make sure; you have multiple options of business loan products to choose from. And select the one that matches your need and objectives.

If you are looking for a business loan, Finmortg brokers can help you. Our broker who will help to make the process as streamlined as possible.

Contact us for a free initial consultation to find a business loan.

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