Historical evidence
Typically recent year-end statements, tax information where requested, current interim results and explanations for unusual changes.
Prepare for financing
What financials do I need for a business loan?
A lender normally needs enough evidence to understand historical performance, current conditions, the purpose of the loan and how the business will repay it under both the base case and a reasonable downside.
Short answerPrepare year-end financial statements, current interim results, supporting working-capital schedules, existing debt, a monthly forecast, assumptions, sources and uses, and a concise explanation of the request. Exact requirements depend on the lender, facility and risk.
A lender-ready financial package
Operating detail
Receivables, payables, inventory, backlog, customer concentration and other schedules relevant to the business model.
Forward forecast
Monthly profit, balance sheet, cash flow, working capital and debt service connected to transparent operating assumptions.
Financing request
Amount, purpose, timing, sources and uses, borrower contribution and proposed repayment structure.
Existing obligations
Loans, leases, guarantees, security, covenants and contingent liabilities.
Management narrative
What changed, why the plan is credible, key risks and what management will do if the downside occurs.
The forecast should answer the lender's next question
- What drives revenue and gross margin?
- How quickly do sales turn into cash?
- What happens to cash during the seasonal low point?
- When do principal and interest begin?
- What happens if sales are lower or collections are slower?
Do not submit disconnected spreadsheets
A forecast is more credible when operating assumptions flow through the income statement, balance sheet and cash flow and reconcile with the debt schedule. Read the detailed guide to a cash flow forecast for a business loan in Vancouver.
Before approaching the lender
Estimate how much the business can borrow, identify the lowest cash point and resolve inconsistencies between statements, tax filings, forecasts and the financing narrative.
Strengthen weak cash conversion
If receivables, inventory or payment timing are creating pressure, review how to improve cash flow before applying for financing.
Requirements vary. Confirm the final checklist directly with the proposed bank, credit union or other capital provider. Forecasts are decision information, not an assurance engagement or lending approval.