What documents do I need for a business loan?

For a limited company, a lender asks for recent business bank statements, the last filed accounts, up-to-date management accounts, details of existing finance, and identity and address evidence for each director. For a larger loan or a new business, add a plan and a cash flow forecast.

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Why the lender wants each one

Each document answers one of the lender’s questions. The bank statements show how the account is run and what already goes out in repayments. The filed accounts show the size of the business, its profit and its balance sheet. The management accounts bring that up to date. The identity documents let the lender meet its money laundering obligations. The forecast shows how the loan will be repaid.

Have them ready before you apply. A lender that has to ask twice for the same document starts to wonder what else is missing, and an application that stalls for a document can lose its place in the queue. Keep each one as a clear PDF, named by what it is and the period it covers.

What to have ready

Lenders can ask for more, or accept less for a small loan. Ask for the lender’s own list before you start.

A woman going through invoices beside her laptop

Accounts and management accounts

A private company has nine months after its year end to deliver accounts to Companies House, so the latest filed accounts can be well over a year old. A lender bridges that gap with management accounts: a profit and loss account and a balance sheet for the months since the year end, prepared on the same basis as the filed accounts.

Reconcile the bank balance in the management accounts to the statements, and keep the accounting software up to date. Some lenders and funding searches read the figures straight from the software, with your consent, and they read what is there on the day.

If profit has moved a long way since the last accounts, in either direction, explain why in a few lines. A lender reading a fall with no explanation assumes the worst.

Documents for particular types of funding

For asset finance, the lender needs the supplier’s quote or invoice for the asset, with its make, model and serial number, and for a used asset its age and condition. For invoice finance, it wants the aged debtors list, sample invoices, the terms you sell on, and any contracts with large customers.

For a commercial mortgage or a loan secured on property, add the property’s title details, any lease, and the lender’s valuation, which the lender orders and you pay for. For acquisition finance, the lender wants the target’s accounts, the heads of terms and the results of due diligence.

Some lenders will read bank data through open banking in place of PDF statements. You give a regulated firm read-only access to the account for a set period. How open banking is used in a loan application.

Terms on a lender’s list

Management accounts
A profit and loss account and balance sheet for the months since the last year end.
Aged debtors list
Every unpaid customer invoice, grouped by how long it has been outstanding.
Aged creditors list
Every unpaid supplier bill, grouped the same way.
Cash flow forecast
Money expected in and out of the bank each month, with the new loan’s repayments included.
Statement of personal assets and liabilities
What a guarantor owns and owes, asked for when a director gives a personal guarantee.

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The monthly repayment on a business loan, the interest over the term and the total you repay with the arrangement fee.

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Questions people ask

How many months of bank statements do lenders want?

Each lender sets its own period. Have every business account’s statements for at least the last 12 months ready, as PDFs from the bank or through open banking. If the business has traded for less than that, provide what exists, with personal statements for a new business.

Do I need audited accounts for a business loan?

No, unless the company has to be audited anyway. A small company that is exempt from audit provides the accounts it files at Companies House, and management accounts for the months since. A lender may ask for the full accounts where the company files a shorter version at Companies House.

Do I need a business plan for a business loan?

For a new business, yes: it is what the lender has in place of trading figures. For an established company borrowing a modest amount, a short note of what the money is for and how it will be repaid can be enough. For a larger loan or an acquisition, expect to provide a plan with a monthly cash flow forecast.

Can I use open banking instead of uploading bank statements?

Where the lender offers it, yes. You give the lender, or a firm working for it, read-only access to the business account through your bank’s own app, for a period you agree. The lender reads the transactions directly. You can withdraw the access through the firm or your bank.

What identity documents do directors need?

Lenders must check the identity of the directors and of anyone who owns or controls the company. Expect to provide a passport or photocard driving licence and a recent document showing your home address, such as a bank statement or council tax bill. Some lenders check identity electronically and ask for documents only if that check fails.

What do lenders look at for a business loan?

A lender reads the company's bank statements and works out whether its cash covers every loan repayment with room to spare. It then checks the trading history, the Companies House record, the credit files of the company and its directors, and what the money is for. The full answer.

How is open banking used in a loan application?

Open banking lets you give a lender, or a firm working for it, read-only access to your business bank account, so it can see transactions and balances without you sending statements. You choose what to share and for how long, and you can withdraw consent through the firm or through your bank. The full answer.

How much can my business borrow?

A lender sets the limit from your debt service cover: the cash the business generates in a year divided by a year’s repayments on all its loans. Work backwards from the minimum cover a lender accepts and you reach the largest yearly repayment, and from that the largest loan. The full answer.

Business loans

A business loan is a sum your business borrows and repays with interest over a fixed term, in regular instalments. The lender prices it on the risk it reads in your accounts, your bank statements and any security you offer. Compare offers on the total you will pay in pounds, counting every fee. The full answer.

Finance is subject to status and to the lender’s terms. A personal guarantee makes you liable for the company’s debt if it does not repay, and it can be enforced against your own assets, including your home. Nothing here is a personal recommendation.

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Funding searches run on Swoop’s platform. Swoop Finance Limited is a credit broker and not a lender, and is authorised and regulated by the Financial Conduct Authority (FRN 936513). Buzz Accounting Ltd introduces businesses to Swoop and may receive a fee from Swoop when funding is arranged. Business funding is separate from the financial advice Equity & General Financial Services Limited gives through this website. Finance is subject to status, and a lender may ask a director for a personal guarantee.

Cover for a personal guarantee

If a lender asks you to guarantee the company’s borrowing, our advisers can advise on life cover for that debt.

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