Preparing for the Next Loan Application

Previously: Exploring Alternative Funding Options

You’ve been denied for a loan. It happens. Rather than wallow in disappointment, you’ve decided to take the lender’s feedback and strengthen your application. You’ve refined your business plan, worked to improve your credit scores and explored all your funding options. So, what’s next? 

The following checklist is designed to help your business put its best foot forward, demonstrating to your lender that you are serious about growing your business. 

Is Your Application Ready?

Before you reapply, it is essential to have all your documentation organized, accurate and current. Review and, where possible, update each of the following before meeting with your lender:

Business Plan: Ensure your business plan reflects your current operations, recent progress and what your future growth strategies look like. Lenders want to see how you plan to use your loan and how it will benefit your future business.

Complete Financial Statements: Include your most recent Profit & Loss Statement, Balance Sheet and Cash Flow Statement.

Credit Reports: Pull both your personal and business credit reports to ensure there are no errors and that you are prepared to answer questions regarding your credit history.

Business Operating Documents: Depending on the legal structure of your business, you may need to share other essential documents, such as:

• EIN (Employer Identification Number)
• Certificate of Organization and Operating Agreements (for Limited Liability Corporations or LLCs)
• Certificate of Incorporation and Bylaws (for Corporations)
• Ownership Percentages – Anyone owning more than 25% is considered a “Beneficial Owner” and must be reported.

Collateral Documentation: If you are offering collateral, you will need to provide additional items, such as:

• Titles (original ones must be provided at closing), equipment serial numbers and bills of sale or purchase orders.
• Insurance providers’ contact information to obtain a copy of your business insurance for collateral.
• A copy of your business location lease if applicable.
• A government-issued photo ID.

Building a Relationship with Your Banker

Lenders aren’t only decision makers, but they are also your partners. Developing a relationship with your banker can make a significant difference when it is time to apply or reapply. Set up meetings with your lender to discuss your business goals, including your ongoing needs and objectives with this loan and any you may need in the future.

When meeting with your lender, ask questions about the loan process, the specific documentation needed and what factors they think will be most important in your application. Making a stronger connection with your lender will demonstrate your commitment to improving your financial standing.

What to Do After Reapplying

• Follow up regularly to check the status.
• Respond promptly to any additional requests from a lender.
• If you are approved, make sure you fully understand the loan terms before accepting.
• If you are denied, don’t be discouraged. Lenders will provide documentation outlining the reasons for the denial. Review the information carefully for how you can improve.

Want to ensure your application is ready to go? Reach out to The Iowa Center for more information.

Think of the reapplication process as a second chance. With the right documents, a clear strategy and a stronger relationship with your lender, you will be well-positioned to secure the funding you need.

Next up: Additional Business Loan Application Resources and Tools