What lenders really want: A borrower’s guide to preparing a winning loan application

Starting or growing a business often comes down to one key ingredient: access to capital. But before a lender says “yes,” they need a clear, complete picture of both you and your business. While the process can feel paperwork-heavy, each document serves a purpose — helping lenders evaluate risk and, ultimately, your ability to succeed.

The good news? If you’re based in Utah, you’re not alone. Entrepreneurs have access to valuable support through organizations like the SBA’s Small Business Development Centers, which can help you prepare your loan package — often at little or no cost (https://utahsbdc.org). For those just getting started, the SBA’s business guide (https://www.sba.gov/business-guide) is an excellent resource for building a strong foundation. Here’s what lenders typically expect when you apply for business financing.

Start With Your Personal Financial Story

Before lenders dig into your business, they look at you. The process begins with a loan application and an IRS authorization form, allowing lenders to verify your tax returns directly with the IRS. From there, you’ll need to provide a personal financial statement for each owner with at least 20 percent ownership. Additional personal documents include:

• Recent personal tax returns (full copies).
• Driver’s licenses for all principals.
• Professional resumes for each owner.

Your resume is more than a formality; it demonstrates your experience and ability to run the business effectively.

If you’ve faced financial challenges, honesty is key. Lenders will ask for explanations of bankruptcies, late payments, or liens and judgments. Clear, straightforward responses can help build credibility rather than raise concerns. For government-backed loans, proof of U.S. citizenship is also required.

Define Your Business Structure Clearly

Next, lenders want to understand how your business is organized. This includes providing corporate documents — such as LLC operating agreements, articles of incorporation, or trust documents — along with a breakdown of ownership percentages. If your business has affiliates, those relationships must also be disclosed. A strong business history and description tie everything together, giving lenders insight into what your company does, who it serves, and how it generates revenue.

Financials: The Heart of the Application

If there’s one area lenders scrutinize most, it’s your financials. You’ll need to provide documentation for your operating business, any real estate holding company, and affiliated entities, including:

• Two years of business tax returns (full copies).
• A current balance sheet.
• A current profit and loss statement.
• Accounts receivable (AR) and accounts payable (AP) aging reports.
• A debt schedule listing all liabilities.

For newer businesses — those operating less than two years — lenders will also expect financial projections, along with detailed assumptions explaining how those numbers were developed. If there are any issues on your business credit, be prepared with written explanations and supporting documentation.

Show Exactly How Funds Will Be Used

Lenders don’t just want to know how much you need; they want to know why. A detailed use of funds breakdown is essential. Depending on your project, you may also need:

• A purchase agreement and addendums for real estate or equipment.
• Construction bids or cost estimates.
• Equipment invoices.
• A gift letter if funds are being contributed by a third party.
• Documentation for prepaid expenses.

The clearer your plan, the easier it is for a lender to evaluate your request.

Don’t Forget Third-Party Reports

Many loans require independent verification through third-party reports, typically paid for up front by the borrower. Common requirements include:

• A real estate appraisal to confirm property value.
• An environmental report to identify potential risks.

These reports help lenders ensure the collateral and project meet lending standards.

Local Resources Can Make a Big Difference

Preparing a loan package doesn’t have to be overwhelming. Utah entrepreneurs have access to excellent support through the Utah SBDC network (https://utahsbdc.org), where advisors can help organize financials, refine projections and strengthen applications. Pairing that support with SBA guidance can significantly improve your readiness, and your chances of approval.

The Bottom Line

A strong loan application isn’t just about paperwork; it’s about presenting a clear, organized and credible story. When your financials are accurate, your documents are complete, and your plan is well thought-out, you make it easier for lenders to see the opportunity — and say “yes.”

Caryl Eriksson is the CEO and president of InterMountain Business Lending. She is available at ceriksson@im504.com or 801-627-1333.