A strong business loan application does more than request an amount. It shows the lender why the funds are needed, how they will support the business and where the repayments will come from.

Clear numbers make that story easier to assess.

The Financial Health of the Business

Lenders may review:

• Revenue and profitability over time

• Cash flow and the ability to meet repayments

• Existing loans, leases and tax debts

• Assets and liabilities

• Trading history and time under current ownership

• The industry and its risks

• The credit history of the business and relevant directors

A profitable business can still experience cash flow pressure, so lenders will often look beyond the profit and loss statement.

The Documents Behind the Numbers

Depending on the lender and loan type, you may need recent financial statements, business tax returns, bank statements, BAS records, cash flow forecasts and details of existing debts.

For a new business or major expansion, a business plan, contracts, quotes or evidence of projected income may also be useful. If security is involved, the lender may request information about the asset and arrange a valuation.

A Clear Reason for Borrowing

Explain exactly how much you need and what it will fund. A vague request for extra cash is harder to assess than a defined plan for equipment, inventory, premises or working capital.

The requested term should also make sense for the purpose. Ideally, the finance should be repaid within the useful life of the asset or benefit it is funding.

Final Thoughts

Preparation can make a business finance application clearer, faster and easier to present to suitable lenders.

Prestige Finance Brokers can identify the likely documentation, help structure the request and compare lenders whose policies align with your business position.

General information only. Documentation and approval requirements vary by lender, product and business circumstances.