What goes into the application?
Tax returns, a profit-and-loss statement, a balance sheet, what you'll use the money for — and usually your personal finances too. Lenders want the whole picture.
What's in the loan agreement and note?
The core promise: amount, rate, schedule. Plus the covenants — rules you agree to live by while the loan is open, like sending financial statements or not taking on other debt without permission. Read the covenant list slowly. It's the part owners skip and regret.
What are the security agreement and UCC-1 filing?
This pledges business property as collateral. The UCC-1 (a standard public filing under the Uniform Commercial Code) puts this lender first in line for that property. It also shows up when other lenders check on your business, so know what you've pledged.
What does the personal guaranty mean for you?
Your company's legal shield (the LLC or corporation) normally protects your personal money. The guaranty hands that shield back for this loan. Things worth negotiating: whether the guaranty covers the whole loan or a capped amount, whether it shrinks as you pay the loan down, and whether a spouse must sign. If a lender wants your house as backup too, slow down and get advice.
Which company papers do lenders want?
Your formation documents, plus a resolution showing the business approved the loan and who's allowed to sign it.
What extra forms do SBA loans add?
If it's an SBA (Small Business Administration) loan, expect extra government forms and an SBA guaranty fee.
Questions people ask
What is a personal guaranty?
Your personal promise to pay if the business can't. It reaches past your company's legal shield and into your own pocket, so read it twice.
What are covenants?
Ongoing rules you agree to live by while the loan is open, like sending financial statements or not taking on other debt without permission. Breaking one can put the loan in default even if you never miss a payment.
Which business loan terms can be negotiated?
The guaranty's size, the covenants, and prepayment penalties. Whether the guaranty shrinks as you pay the loan down is also worth asking.