Need a loan? Here’s what you need to know before the meeting.

If your small business needs a loan or a line of credit, you will need to be well-prepared before you meet with the lender. The tips below will help you to put your best foot forward when you meet with a lender.

Items you will need to start the application process:

Personal Financial Statement (PFS).The financial institution will have you provide a Personal Financial Statement (PFS) for yourself and any co-applicants. The PFS is a “snapshot” as of a certain date listing all of your assets and liabilities, which is used to calculate your “net worth.” You will also need to provide all sources of income as a part of the PFS.  It’s very important that the PFS be completed as accurately and legibly (if completing by hand) as possible. This may give the financial institution an indication of how well you understand your finances and your financial situation.

Schedule of business debt you owe that includes: financial institution name, loan type, current balance owed, maturity date, # of payments remaining, monthly payment, and repayment terms (i.e. interest only monthly, principal & interest monthly, etc.).

Last 3 Years of Personal Tax Returns.

Last 3 Years of Business Tax Returns.

Year-to-date company-prepared Balance Sheet and Income Statement.

When speaking with a financial institution during the initial loan request be prepared to discuss the following:

What is the purpose of the loan (i.e. refinance, purchase a building, equipment loan, line of credit, etc.)?

How long have you been in business?

What exactly does your business do?

What are your annual revenues and how do you generate money and make a profit?

What is the financial health of your business (i.e. good cash flow, positive net income, approximate cash on hand, etc.)?

If you have a written business plan with financial projections, be prepared to discuss how you arrived at the calculations.

You want to “put your best foot forward” and “tell your story” to the financial institution, and having a good handle on the finances of your business will greatly help. Remember, you are asking them to loan you their money, and “strength of management” is one of the areas they will evaluate when deciding whether or not to make the loan.

Davis Johnston is the Vice President of Business Lending at Community First Credit Union. He can be reached at (904) 549-8706 or