List of Requirements for a Grinnell State Bank (GSB) Small Business Loan
Most small businesses need financial support to fulfill their potential. Even if you worked hard and saved for years or decades, your business will benefit from an infusion of capital through a small business loan. Whether you are looking to expand your enterprise, acquire another business, merge with another company, buy real estate, purchase machinery or add to your inventory, your business will benefit from a loan.
Even if you have the funds necessary to pay for the cost of expansion or the purchase of the items listed above, it still might make financial sense to take out a loan. Secure a small business loan for your Iowa business and you’ll free up your remaining capital to cover overhead expenses and make strategic business moves that otherwise would not be possible if you were cash strapped.
Requirements to Qualify for a Business Loan
The first step in obtaining a small business loan is to compile the appropriate documentation for Grinnell State Bank to review. Your business loan request is predicated upon a review of your current financials and previous income tax returns. You must include your personal taxes as well as your business’s federal tax returns pertaining to the principals of the enterprise across the three previous years. Financial statements such as the business’s balance sheet, year-to-date profit and loss statement and Pro Forma statements must also be submitted. If you can’t demonstrate that you will be able to repay the loan, your request will not be approved.
Be Forthright About the Business Ownership and Affiliations
Information about the ownership of the business and its affiliates must also be provided. List the names and addresses of the business’s subsidiaries and affiliates. Even if you have a partial controlling interest in an entity, we need to know that information. The principal owner of the business is to provide a personal financial statement in addition to the financial statements pertaining to the business itself.
Franchise affiliations, stock ownership and proposed mergers must be clearly stated. The business certificate, license and/or articles of incorporation will also be necessary for business loan approval.
Though few business owners are aware of it, they must also provide a copy of any existing loan, lease, or rent payments they are currently servicing. This is necessary to determine the total monthly or annual obligations of the business and can even result in existing obligations being refinanced to more favorable terms with Grinnell State Bank.
What If Your Business is a Start-up?
If your business is a startup or if the business has not yet been launched, we will require a business plan. The purpose of submitting a business plan is to prove the entity is capable of earning revenue and repaying the requested loan in full. Create a business plan that details the market opportunity, analysis of the competition, a description of the business activities and an executive summary. Even details pertaining to your marketing strategy and contingencies in the event of setbacks will boost your chances for loan approval.
Above all, the plan should explain what the loan will be used for. This is your opportunity to delve into how the infusion of capital will expedite growth or help your business transition from the red to the black. The more specific you are with figures and facts, the more likely it is that your business plan will make the intended impact and set the stage for approval.
Loan Requirements for Purchasing Another Business
If your aim is to obtain a loan to acquire another Iowa business, the requirements for approval will be slightly different. Your loan application must include the profit and loss statement of the business you are attempting to acquire. The target business’s balance sheet must also be provided for review.
Additional requirements to obtain a loan to purchase another business include the proposed Bill of Sale along with the specific sale terms. The prior three years of federal income tax returns must be submitted. This unique type of loan also requires that the ask price along with the schedule of inventory, equipment, machinery, fixtures and furniture.
You’re Approved for a Small Business Loan. Now What?
If your loan application is approved, your attention will likely shift toward the terms of repayment, whether payments will be automatically taken out of your business’s bank account and the potential interest that will accumulate throughout the period of the loan. Business loan repayment typically starts a month after the date of the loan’s origination, however, the type of loan ultimately determines the specific options for repayment.
The commercial loan you obtain for your small business in Iowa might require payment on a monthly, quarterly or semiannual basis. Grinnell State Bank is proud to provide our business loan customers with the option of automatic payments. Review the nuanced terms of your Iowa business loan with one of our banking specialists or your accountant and you will have a better understanding of the repayment terms.
Apply for a Small Business Loan With Grinnell State Bank
Do you own a small business in Iowa? If you are a business owner or considering starting a business, GSB is here to help. We provide straightforward, fair and transparent loans for Iowa small businesses. Our commercial loan decisions are made on the local level, meaning someone in your community or nearby will evaluate your loan application.
Reach out to us today to learn more about our loans for Iowa businesses. You can reach GSB by dialing (800) 236-3187. If you prefer to contact us on the web, complete our contact form and we will be in touch at our earliest convenience.