Documents you need for a business loan

The documents a lender asks for depend on the amount, the type of finance and the lender itself. A small unsecured loan may need little more than recent bank statements, while a commercial mortgage involves much more. Having the common documents ready before you apply makes the process quicker, cuts down on back-and-forth and shows the lender you run an organised business. This checklist covers what UK lenders most often ask for.

Business bank statements

Almost every lender wants to see recent business bank statements, commonly covering the last three to six months and sometimes twelve. They should be complete, covering every page and every account the business uses for trading, not just the main one. Many lenders accept statements downloaded from online banking as PDFs, and some use secure open banking connections to read them directly with your permission.

Before you send them, look through them as a lender would. If there are unusual transactions, a large one-off payment, a dip in income or a period of overdraft use, be ready to explain them. If the business has recently changed bank, include statements from the old account as well so the lender can see a continuous record.

Accounts and management information

• Filed accounts: your most recent full-year accounts, and often the year before, so the lender can see the trend.
• Management accounts: an up-to-date profit and loss and balance sheet, especially if your last filed accounts are several months old or don’t reflect how you are trading now.
• Forecasts: for larger loans or growth plans, a cash flow forecast showing how the repayments will be met.
• Aged debtor and creditor reports: often requested for invoice finance and working capital facilities.

Your accountant can usually produce management accounts and forecasts quickly if you don’t prepare them yourself. Make sure the figures match what appears in your bank statements. If your accounts are overdue at Companies House, file them before you apply, as late filing can concern lenders and may show up in their checks. For newer businesses that haven’t yet filed a full year of accounts, lenders tend to rely more heavily on bank statements and management information instead.

Tax information

Lenders may ask about your position with HMRC, particularly for VAT and tax loans. Have recent VAT returns and corporation tax information to hand. If you have a time to pay arrangement with HMRC, mention it up front. Hiding tax arrears tends to cause more problems than disclosing them, because they often show up in bank statements anyway. Lenders generally want to see that PAYE and VAT payments are being made on time, as these are a useful sign of how well the business manages its obligations.

Company and director details

• Company name, registration number and registered address.
• Details of all directors and of anyone holding a significant share of the business.
• Photo identification and proof of address for the directors, to meet anti-money laundering checks.
• Directors’ residential addresses for the last three years, which lenders use for credit checks.
• For LLPs, details of the members and the partnership agreement if requested.

Existing borrowing

Lenders need a full picture of what the business already owes. Prepare a simple list of existing loans, overdrafts, credit cards, asset finance agreements, merchant cash advances and any director loans, with the lender, the balance outstanding, the monthly repayment and when each ends. If part of the new loan will refinance existing debt, settlement figures from the current lenders will help.

Details of the purpose and any security

Be ready to explain what the money is for. Depending on the purpose, a lender may want to see:

• Quotes or invoices for equipment, machinery or vehicles you are buying.
• Details of a contract the loan will support, such as a purchase order or signed agreement.
• For property, the address, purchase price or valuation, title details, any existing mortgage and, for investment property, tenancy information.
• For invoice finance, a list of your customers and their payment terms.

Getting it ready

A little organisation goes a long way. Keep the documents in one folder, name files clearly and check that dates are recent. Make sure the information is consistent: turnover you state on an application should match your accounts and bank statements, and any differences should have a simple explanation. Send documents through the secure channel the lender or broker provides rather than ordinary email where possible.

Lenders can always ask for more, and requests vary between providers. Responding promptly and fully is one of the simplest ways to keep an application moving. If you can’t provide something a lender asks for, say so and explain why, as there is often an alternative that will do the same job.