Whether you need a fleet of vehicles, top-of-the-line electronics or just some more office furniture, financing is an effective, low-risk way to grow your business without high upfront costs.
However, depending on your circumstances, it can take several weeks or more to secure asset finance, even with the help of an experienced, well-connected broker like Kane Financial Services.
That said, you can speed up the process by preparing all the documents you need to apply for finance in advance.
To make your application as fast and smooth as possible, we’ve put together a checklist of business finance paperwork that you’ll need – as well as a few other things to take into account.
Essential paperwork for your finance application
Personal and business information
As with most paperwork, you’ll need to start by giving lenders some basic information.
This includes your full name, address, date of birth and contact information, as well as the address of your business and company bank details.
You’ll also need to provide proof to show the details you’ve given are genuine. So make sure you have a photo ID such as a driver’s license or passport, and proof of address through a utility bill or letter from your bank.
Financial statements
When lenders accept your financing application, they’re taking on a certain amount of risk.
As such, they need to see accurate, up-to-date financial statements to determine your business’s financial health, your ability to repay, and the rates and terms they’re prepared to offer you.
Financial statements you should prepare include your:
- Income (profit and loss) statement: Your revenues, expenses and net income over time show lenders whether your business is profitable and how well you manage costs
- Balance sheet: Your assets, liabilities and equities provide an indicator of your business’s financial situation and how likely you are to keep up with your monthly repayments
- Cash flow statement: While not always required, some lenders might request this as evidence of how your business makes money and manages operational expenses
On rare occasions, lenders might also ask to see your business’s tax returns for the past few years. These statements give them an independent overview of your business’s financial performance, and prove that you consistently comply with government regulations.
Documents depending on finance type
Different types of financing have different application requirements. So you might need to provide specific paperwork depending on what kind of financing your business needs.
For example, if you apply for construction equipment finance, you lenders typically want to see:
- Equipment information such as specifications, quotes, invoices and supplier details to better understand its financial and practical value
- Purchase agreements or contracts already negotiated, as these demonstrate your sincere commitment to your finance agreement
- Collateral documentation showing the equipment’s condition, location and insurance as extra assurance that the lender’s collateral is secure
If, on the other hand, you’re refinancing existing assets to generate working capital for operational expenses, you might need to provide:
- Six months of business bank statements to show your cash flow and financial transactions
- Management accounts that indicate financial performance over a greater timespan
- Your latest unabbreviated annual accounts as detailed evidence of your finances
Providing specific financing paperwork with your initial application shows lenders that you fully understand their requirements and are prepared to use their money wisely.
A business plan
You’re typically only required to provide a business plan if you’re a startup company with little financial documentation.
But even if you’re an established business, it could be necessary for securing the funds to launch major expansions or enter new markets.
A thoughtful, detailed business plan should give lenders a clear understanding of your company’s objectives, strategies and financial projections.
To achieve this, your plan should include the following sections:
- Executive summary briefly describing your business and its goals
- Company description containing detailed information on your industry and value proposition
- Market analysis covering your target customers, main competitors and industry trends
- Products or services that you offer and why you feel they’re profitable
- Financial projections including expecting income, outgoings and cash flow
In addition, you should also outline how you plan to use funds gained through financing and how they’ll contribute to your business growth.
Other financing considerations
Credit rating
Your business’s credit score directly affects its eligibility for financing.
If your score is excellent, lenders are likely to offer finance agreements with lower interest rates and more lax terms. That’s because a strong credit rating positions you as a lower-risk applicant.
On the other hand, a poor credit rating marks you as a higher-risk applicant. So you might have to consider more stringent rates and terms.
Even if your credit score is less than ideal, financing is still a worthwhile option for growing your business.
Rather than waiting to build up a large sum of capital, financing allows you to purchase profitable assets and put them to use immediately.
Increasing your revenue in this way makes it easier to pay back your business loan, and typically leaves responsible businesses in a superior financial position overall.
Licenses and permits
If your business is part of a regulated industry, you’ll need to prove that you’re authorised and meet industry standards.
As part of your application, prepare copies of any licenses, permits and certifications that could be relevant to your financing goals.
This will give lenders greater confidence that your business is compliant and well-positioned within your industry.
Contracts and agreements
If your business relies on contracts and agreements with clients, suppliers or partners, include these in your initial financing application as evidence of your revenue streams and potential liabilities.
These could include:
- Client contracts showing your customer base and projected income
- Supplier contracts to demonstrate a stable supply chain strategy
- Partnership agreements as evidence of additional revenue sources
Find the right lender with Kane Financial Services
Now that you know what documents you need to apply for financing, it’s time to find suitable lenders for your business.
And the best way to do that is through an established, trusted asset finance broker like Kane Financial Services.
We’ve spent more than 35 years helping businesses throughout Northern Ireland and the UK grow with asset finance.
Even better, as independent asset finance brokers with strong connections, we can match you with market-leading rates and terms that high street lenders can’t hope to match!
Apply for asset finance online today and we’ll be in touch as soon as we can to discuss your business financing options.