P.A. The following information is an excerpt from seminar materials prepared by Bonnie Paisley and Meg Meister at a recent seminar on How to Finance the Small Business. This outline provides information about what lenders are interested in when considering lending money to a small business and includes tips on how small businesses can improve their chances in obtaining bank financing. Understanding the Small Business Loan Process and Documentation Requirements of Commercial Bankers 1.
Banks look for ideal loan applicants.
Their goal is to make a loan to a person or group of people who are going to pay back the loan under the terms agreed to. An indication that cash flow will be sufficient to make the loan payments b. Loan documentation supports the business or underwriting requirements of the bank and the legal requirements to secure the loan a. A promissory note evidences the debt b. A security interest in personal property is generally perfected by filing a financing statement in the Secretary of States office or, with certain types of collateral, by taking possession of the collateral, either actually or through a control agreement with a third party.