In today’s shifting economic landscape, business owners are facing uncertainty—and many are asking the same question: What should I be discussing with my banker to prepare for a loan? Whether you’re planning to expand, invest in new equipment, or just want to strengthen your financial position, having the right conversations with your banking partner can make a significant difference. Here’s a quick guide to help you navigate those conversations with confidence.
We will walk you through what to consider before applying for a loan, including how to strengthen your business credit score, organize your financial statements, and position your company for financing success. From choosing the right loan type to preparing your loan application package, these steps will help you approach potential lenders with confidence.
If you’re ready to apply for a business loan or just exploring your options, this guide is a must-read for small business owners across Missouri and beyond.
Are You and Your Bank Aligned?
Before you fill out a single loan application, take a step back and ask: Is your bank the right financial partner for your business? Alignment between your business and your lender is one of the most overlooked, but essential, parts of preparing for a business loan.
Here’s what alignment looks like:
- Industry Knowledge: Does your banker understand your business model, your industry’s seasonality, and the common risks you face? A lender who knows your market can provide more tailored financing options and anticipate your needs.
- Relevant Products: Different businesses require different loan types. Whether you’re seeking a term loan for equipment, a line of credit for working capital, or an SBA loan for expansion, your bank should offer the loan options that fit your goals.
- Access to Expertise: Your relationship with your bank shouldn’t stop after the loan is issued. Look for a financial institution that surrounds you with additional resources, like treasury services, credit card solutions, or financial statement guidance, to help you grow long after the funds are disbursed.
When your lender truly understands your business, they become more than a financing source; they become a strategic partner.
Prepare the Right Documents for Your Loan Application
Once you’ve aligned with a lender that understands your business, the next step is gathering the financial documents needed to support your loan request. Lenders use this information to evaluate your creditworthiness, cash flow, and ability to repay the loan, so being organized upfront can make a big difference.
Here’s what most banks and online lenders will typically require:
1. Financial Statements
- Profit and loss (P&L) statement
- Balance sheet
- Cash flow statement
These show the financial health of your business and help the lender assess your capacity for loan repayment.
2. Bank Statements
Most lenders will ask for the past 3–6 months of business bank statements. These help verify revenue patterns, expenses, and cash reserves.
3. Tax Returns
Both business and personal tax returns from the last 2–3 years may be required, depending on the loan type. This gives lenders a full picture of your income and obligations.
4. Business Plan
Especially important for startups or businesses seeking SBA loans, a clear business plan outlines your operations, revenue strategy, and how the loan will be used to grow the business.
5. Credit Information
Lenders will review both your business credit score and personal credit score, so it’s important to check your credit report in advance and resolve any errors before applying.
Having these documents ready shows that you’re serious, organized, and prepared—a strong first impression for any lender.
Don’t Let the Economy Dictate Your Decision
It’s easy to feel hesitant about borrowing during times of economic uncertainty, but delaying key investments out of fear can sometimes do more harm than good. Instead of letting headlines or market shifts guide your decisions, focus on your business needs, financial readiness, and long-term goals.
Evaluate the Timing Based on Your Strategy
Ask yourself:
- Is this loan supporting growth, sustainability, or recovery?
- Will this financing allow me to seize an opportunity, reduce costs, or stabilize operations?
If the answer is yes, now might be the right time, regardless of broader economic trends.
Lean on Your Lender for Perspective
A well-aligned lender can help you analyze loan options in context, assess risk, and determine the right loan type or loan term for your goals. They may also guide you toward small business loan programs like those offered through the Small Business Administration (SBA), which can provide favorable terms even in challenging times.
The bottom line? External conditions matter, but the best decisions are made with clear data, expert input, and a focus on your business’s future.
Midwest BankCentre Supports Your Full Journey
With decades of experience supporting local businesses across Missouri, Midwest BankCentre brings both the financial tools and community understanding needed to guide you. From reviewing your loan application to structuring repayment terms that align with your cash flow, our bankers are here to support you at every stage.
Whether you’re expanding, hiring, investing in equipment, or simply exploring business financing, the right partner can help you make confident, informed decisions, especially when the stakes are high.