How Do I Apply For A Loan?
At HSBC, we'd like to make the loan process as fast and easy as possible for you. The information requested tells your company's story, its financial history and future – and the role we can play in helping your business grow. In fact, compiling this information can assist your business in other ways as well.
It's a matter of having a clear view of why you need the money, reassuring you have the ability to pay back the loan, providing the required documentation, and filling out the proper forms. Your application is reviewed, approved if all the necessary conditions are met, and the loan is advanced.
The loan process can be accelerated by gathering the necessary information before you begin. Here is a brief overview of some of the documents you will need to provide:
This identifies that your company is a legal entity and is governed by applicable business law. Providing the legal name and tax I.D. number verifies that you are the one receiving this loan. Also, it prevents a newer business from duplicating the name of another company, and avoids confusing your credit history with any other similarly named business.
The nature of the verification also identifies what type of business you are, which is important for tax liability purposes. A Sole Proprietorship with an assumed name should include an assumed name certificate filed in your county of residence. A Partnership would provide a partnership agreement. And a Corporation would provide a copy of its certificate of incorporation, as well as a completed HSBC corporate resolution form.
Personal Financial Statements
Smaller businesses often intertwine their personal and corporate assets. By providing personal records - a disclosure of your assets and liabilities - as well as business statements, you are preparing a complete financial picture, thereby increasing your borrowing options.
Corporate Financial Statements
Applications should be accompanied by three years of these records. The purpose is to more accurately represent your company's financial position. This helps to illustrate growth, highlight the seasonality of your business and explain or discount any unusual circumstances.
Loan requests are often the result of unexpected opportunities, or situations which have developed during the course of the current year. Thus, interim statements need to be added to the previous year's statements. These statements provide a current financial picture and assist in determining your borrowing needs and resource requirements.
Whether you're looking to expand production, you expect this loan to have an impact on your business. Financial projections are a clear expression of that impact, and an objective look at what you can reasonably expect to achieve. This serves two purposes: first, to be sure of the value of the loan to you, and second, to provide your bank the necessary information so that we can offer you the best financial solution.
Accounts Payable and Receivable Agings
Reviewing payables and receivables provides great value to your business. It allows you to assess the status of your Accounts Receivable portfolio, determine seasonal borrowing needs, and discover other financial options that are available. Periodic review of Accounts Payable and Receivable could improve your cash flow, so you may need to borrow less over time.
Your current year's return is another way to demonstrate your present business performance, in conjunction with the interim statements and fiscal year-end statements.
To process the paperwork of a loan, you may be requested to provide various proof of usage, such as equipment invoices, purchase offers, copies of lease agreements, contractors' estimates, or copies of vehicle titles. It helps to have these ready in advance.