When it comes to applying for a business loan, it can be difficult to know which documents are required as part of the application process. Each lender uses a different set of criteria to assess the risks and suitability of business loan applications, and not all lenders require the same documents.

Most commercial lenders typically ask for a few key documents that will detail the business's finances, explain how the loan will be used, and demonstrate the ability to repay the loan on time.

Documents Required for a Business Loan Application

Personal Identification

Commercial lenders will ask for valid proof of identification, such as a driver’s license, passport, Medicare card, or other types of government-issued identity documents. In the case of a sole proprietorship or when the business has only one owner, only the owner’s identification is necessary. If the business is a partnership or has multiple directors, the lender may ask for proof of identification for all owners and company directors.

Business Documents

Prepare documents related to the business’s history and activity - these documents are required to provide details to the lender about the nature of the company, such as the industry it operates in, how long it has been in operation, and its ownership structure. 

  • Business registration document from the ASIC
  • The company’s Australian business number (ABN)
  • Ownership details (owners, directors, and legal structure)
  • Tax records
  • Exit strategies
  • Purpose of the loan

Financial Documents

A business loan application will always require documents outlining the business's recent financial standing and performance - the type and number of documents, however, will change from lender to lender.

Commonly requested financial documents for a business loan include:

  • Profit and loss statements and balance sheets from the past 2 years (minimum). Some lenders may ask for accompanying explanations for significant changes in financials from year to year.
  • Forecasted business growth and cash flow projects over the next few years, typically in line with the length of the desired loan term.
  • Valuations of any company-owned assets, such as equipment or vehicles
  • Business activity statements
  • Business bank account statements from the past 12 months
  • Details for assets that are being offered as security for the loan (if applicable)
  • Personal account statements from key owners or directors of the business

These documents should be prepared by an accountant to minimise the risk of erroneous or misrepresented information, which can lead to delays or complications with the loan application process.

Business Loan Considerations

Once all the required documents are ready for the application, business owners and key decision-makers should determine the terms they want for the business loan, such as the borrowing amount, the desired loan term, and how the borrowed funds will be utilised.

Using a business loan calculator tool allows businesses to estimate the impact of the loan on finances, understand the cost of interest, and tailor repayments to a manageable amount.

Some business owners opt to use the equity of a personal asset (such as a home) as security for a business loan to access lower interest rates. When doing so, it’s also crucial to consider the expected loan-to-value ratio (LVR) of a secured business loan. Most commercial loans have an LVR between 60% and 80%, which means that lenders are willing to loan between 60% and 80% of the asset’s value.

Consider Working With a Business Loan Broker  

Business loan brokers simplify the process of applying for a commercial loan by working on behalf of businesses looking to borrow. A loan broker will provide expert guidance on which documents a company will need to prepare to submit a complete application. After gathering the required documents, the loan broker will search for loan options across multiple lenders at once to find one that best fits the business’s needs. 

If you’re looking for a fast and stress-free way to apply for a business loan, work with a local lender in your area - browse our list of approved brokers in Australia and get the right commercial finance for your business.