What documents do you need when applying for a business loan?

Different lenders require different business loan documents. Get prepared with this business loan checklist

Applying for a loan may seem daunting once you’ve decided to borrow finance. That’s why it’s always important to have the right business documents prepared before you do so.

Documentation varies depending on what type of lender you’re looking to borrow from. With a business loan from a bank, you’re likely to be required to provide more documents to limit risks, such as a business plan or insurance. Other lenders might require less.

Brokers who act as an intermediary between the applicant and the lender offer an online application that further reduces the amount of documentation needed.

Go to the section you’re most interested in or read on for the full guide.

  1. Business Bank Statements
  2. Financial accounts
  3. VAT returns
  4. Management accounts
  5. Details of company directors and financiers
  6. Proof of ID and address
  7. Speak to your broker
  8. Other things to consider

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Business bank statements

Business bank statements are an essential document used to verify the income and the outgoings of your company. The statements usually consist of a summary of your transactions which helps determine your spending and income and are typically produced every month.

Financial accounts

Financial accounts are necessary for the lender to gain a clear insight into the company for the full financial year. They allow lenders to see a greater picture of the company, rather than working solely from bank statements alone.

For example, six months’ worth of bank statements might be taken from a period where your business had a quiet trading period. Financial accounts allow the lender to gain a longer-term insight, which shows a truer representation of your business. Turnover, profitability (in the form of profit and loss), and a balance sheet are all contained in financial accounts, which will show your assets, liabilities and equity attached to your business.

Furthermore, financial accounts will also include your company registration number (CRN) and the registered address of your business, should you need to submit these.

Financial accounts for a private company are usually first filed 21 months after the business has been registered with Companies House.

VAT returns

VAT returns, which are usually updated every three months, can be used if your financial accounts are out of date. These returns will show the lender a picture during that year and can be used as an alternative to management accounts. Some businesses though may be VAT exempt.


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Management accounts

Management accounts are used to display an up-to-date impression of how the business is operating in account form. They’re useful for a lender to determine what will be on the next set of accounts. Management accounts normally include the profit and loss of the business and a balance sheet, but there are usually no set rules.

Accountancy software, such as Sage or Xero, can help you create and produce the financial reports you need when applying for a business loan.

Details of company directors and financiers

The majority of lenders will require an application which is filled out by yourself or a broker. This is where the company director/s, shareholders and other financiers’ information will be detailed.

Proof of ID and address

Proof of ID can be provided in the form of a driving licence or a passport. Proof of address can be provided in the form of a utility bill or personal bank account statement.

Proof of ID and address are used to help guard against the possibility of fraudulent activity and money laundering. Essentially it is to authenticate that you are the person you say you are, as well passing any other criteria such as being over 18.


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Speak to your broker

If you are considering a business loan and are still unclear on what documents you need, speak to your broker. They are usually more than happy to help and further explain what documents are needed, as well as answering any other queries you might raise.

Other things to consider

Once you’ve collected the relevant documents mentioned above, there’s a few extra things you might want to consider as a “nice to have”. These aren’t legally required, but can be beneficial when you’re applying and helpful to your business once you start trading fully.

  • Double check the market to see if there’s a better deal you could get. If you’re using a broker, they’ll be able to help you with this, and while you might be better off sticking to your original application, it can’t hurt to look.
  • Go over your business plan again. This is another one that isn’t essential (and you may not want to face all that work again), but making sure that your plan is feasible will sure up your application and help you hit the ground running.
  • Financial forecast – this is an estimate of future revenues and expenses which estimates how much cash is planned to go in and out during a specific period. Part of this will already be included in your application, but it’s good to get a broader view of your business.

Adam Parker is commercial director of credit broker SME Loans.

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Adam Parker

Adam Parker

Adam Parker is commercial director of credit broker SME Loans.