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Be ready before you apply
Checklists of what lenders ask for, a payment estimator, and plain-language definitions of the terms you'll see in a term sheet.
What lenders will ask for
Having these ready shortens the process and makes a stronger first impression. Requirements vary by lender and request size.
Equipment financing
Tap each item as you gather it.
- Equipment quote or invoice from the vendor
- Last three to six months of business bank statements
- Completed credit application
- For larger requests: two years of business tax returns
- For larger requests: year-to-date profit and loss and balance sheet
Good to know
Smaller equipment requests are often approved on bank statements and credit alone. Larger or older-equipment requests usually need full financials.
Working capital & lines of credit
Tap each item as you gather it.
- Last six months of business bank statements
- Two years of business tax returns
- Year-to-date profit and loss and balance sheet
- Accounts receivable and payable aging reports
- Schedule of existing business debt
Good to know
Lenders focus on consistent deposits and your ability to cover new payments alongside existing debt.
Commercial real estate
Tap each item as you gather it.
- Purchase and sale agreement, or current mortgage statement for a refinance
- Property details: rent roll and leases if income-producing
- Two to three years of business and personal tax returns
- Personal financial statement for each owner
- Entity documents (articles, operating agreement)
Good to know
Owner-occupied purchases are underwritten on your business cash flow. Investment properties are underwritten mainly on the property's income.
Receivables factoring
Tap each item as you gather it.
- Accounts receivable aging report
- Sample invoices and proof of delivery
- Customer list with contact details
- Entity documents and owner identification
- Information on any existing liens or UCC filings
Good to know
Approval depends more on your customers' credit than your own, which makes factoring accessible to newer or fast-growing companies.
Franchise financing
Tap each item as you gather it.
- Franchise disclosure document (FDD) and franchise agreement
- Business plan with projections
- Owner resume showing management or industry experience
- Personal financial statement and proof of liquidity
- Two to three years of personal tax returns
Good to know
Lenders look closely at the brand's track record and at how much of your own capital you're putting in.
Business sale preparation
Tap each item as you gather it.
- Three years of financial statements and tax returns
- Schedule of owner add-backs and one-time expenses
- Customer concentration summary
- Copies of leases and key contracts
- Organization chart and key employee roles
Good to know
Starting one to three years before a sale gives you time to clean up issues that would otherwise lower the price or stall a buyer's financing.
See what a payment might look like
Try different amounts, rates and terms to get a feel for the monthly cost before you talk to a lender. Longer terms lower the payment but raise the total interest.
Estimate a monthly payment
Move the sliders to see a ballpark payment.
For illustration only. Actual rates and terms depend on your business, credit, collateral and lender.
Financing terms, explained
The vocabulary lenders use, without the jargon.
- Debt service coverage ratio (DSCR)
- Cash flow available to pay debt divided by the debt payments due. Many lenders look for 1.25 or higher, meaning $1.25 of cash flow for every $1.00 of payments.
- $1 buyout lease
- An equipment lease where you own the equipment for $1 at the end of the term. It works much like a loan.
- Fair-market-value (FMV) lease
- A lease with a lower payment where, at the end, you can return the equipment, renew or buy it at its market value.
- Sale-leaseback
- Selling equipment or property you own to a finance company and leasing it back, turning equity into cash.
- SBA 7(a) loan
- The SBA's most common loan program, used for working capital, equipment, real estate, refinancing and business acquisitions.
- SBA 504 loan
- An SBA program for owner-occupied real estate and major equipment, typically with a lower down payment and long fixed-rate terms.
- Personal guarantee
- A promise by an owner to repay business debt personally if the business can't. Most small business lenders require one.
- UCC lien
- A public filing that gives a lender a claim on business assets used as collateral. Existing liens can affect new financing.
- Advance rate
- In factoring or asset-based lending, the percentage of an invoice or asset value the lender will fund up front.
- Loan-to-value (LTV)
- The loan amount divided by the property or asset value. A lower LTV means more of your own equity is in the deal.
- Covenant
- A condition in a loan agreement, such as maintaining a minimum DSCR or providing annual financial statements.
- Add-backs
- Owner-specific or one-time expenses added back to profit to show a business's true earning power to a buyer or lender.
Let's talk about what you're financing.
A short, no-obligation conversation is usually enough to tell you which options fit and what lenders will want to see.