When a business owner calls me, one of the first things I look at is the nature of the project. A cash flow need and an equipment purchase are not the same file. And they do not call for the same documents.
A cash flow need: a lighter file
For a cash flow need under $100,000, lenders often ask for very little:
- a piece of ID;
- the business's last 6 to 9 bank statements.
Over $100,000, recent financial statements are added.
The lender will also want to understand what the money is for. The clearer the need, the stronger the file. To learn more, see the Working capital page.
Equipment: the lender wants to know the asset
For equipment, the lender wants to know the asset it is financing: the quote, the equipment details, the business and its finances.
I put the full list in a free checklist: the 7 documents to finance your equipment.
Know which category your project is in
Knowing which category your project is in already saves time. You prepare the right documents from the start, and you avoid the back and forth.
Each lender has its own requirements, but this is the starting point I see most often.
Is your next project more about equipment or cash flow?