Documents Needed To Apply For An Unsecured Business Loan

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Key takeaways

Unsecured loans don’t require collateral but still have an underwriting process and documentation requirements
You should have business documents on hand, like a current balance sheet and tax returns
You’ll also need proof of identity and personal tax returns

Information about yourself

To get an unsecured loan or line of credit for your business, you’ll first need to prove that you’re the company’s owner and authorized to borrow on its behalf.

If you’re getting an unsecured loan, the lender will also likely check your personal credit and finances, especially if it’s demanding a personal guarantee for the loan. This way, the lender can assess how you handle your personal finances to determine whether you’re a good risk for offering a business loan.

Be ready to provide:

Proof of identity: Identification that lists your birthdate — like a passport or driver’s license. Every lender will want this to make sure you’re who you say you are.
Personal bank statements: This is less common, but lenders may ask for bank statements if they’re requiring a personal guarantee. Having strong personal finances backs up your promise to pay the loan if your business can’t.
Tax returns: Lenders may want to see how much you make personally to determine if you could repay the business loan if your business can no longer make payments.
Social Security number: Banks will need your SSN to confirm your identity and link your loan with your credit report.
Contact information: You may need to provide both home and business addresses and phone numbers.

Usually, the lender will check your personal credit, so you don’t have to have a report ready yourself. Almost every lender will check your personal credit, especially if you’re offering a personal guarantee. But since your personal credit is an important factor in determining your eligibility for small business loans, check your score before applying to understand which loans you may qualify for.

Bankrate insight

A personal guarantee is a legally binding promise to use your personal assets to repay a loan if your business defaults on it. It’s common on both secured and unsecured loans.

Documents about your business

When you apply for unsecured business loans, lenders will want to take a look at your company’s financial situation and history. You’ll need to have these documents ready to apply for an unsecured business loan.

Business formation information: Details like your company’s employer identification number, ownership and business structure are required for every loan. This ensures your company is legitimate and you’re representing it properly.
Credit report: Like your personal credit report, the lender will obtain this on their own. But you may want to check your business credit before applying to see what you qualify for and whether you can improve your credit.
Financial statements: Lenders will commonly ask for the most recent bank and loan statements for your business to make sure you can afford the new loan. Most lenders want to see statements from a business bank account.
Balance sheet: Lenders usually ask for this document to see a full picture of your business’s assets and liabilities. They want to see that you’re not deep in debt and that you have strong financial health.
Tax returns: If you’ve been running your business for a year or more, lenders will ask for these to check long-term performance. A history of steady or rising revenue and profit is good.
Business plan and projections: Needing these documents is less common, but some lenders will ask, especially if you want a large or long-term loan or your company is quite new. Having a strong business plan and reasonable projections can help give the lender confidence that your company will become or remain profitable.

Bankrate insight

Banks often have stricter loan requirements than alternative lenders who operate exclusively online. You may need more documents for an unsecured bank business loan than you would with an alternative lender, so double-check the list of necessary paperwork before applying. Missing or incomplete documents will result in delays or possible rejection.

How to apply for an unsecured business loan

Getting an unsecured business loan involves a few important steps. Here’s a quick overview of how to apply for an unsecured business loan.

Research loan options: Explore the types of unsecured business loans and choose the one that suits your business needs.
Select a lender: Determine which lenders offer the type of unsecured business loans you want. Consider key factors like interest rates, fees and terms, as well as the lending requirements for each unsecured business loan.
Apply: Submit your application and documents for the unsecured business loan.
Approval: Await the lender’s decision, which can take a minimum of one day to several weeks. If approved, review the loan terms, sign the loan agreement and receive your funds.

The bottom line

Though unsecured business loans are usually faster and easier to apply for than a secured loan, you’ll still need some paperwork ready when you apply. Have these documents ready so you can get through the application process quickly. Not meeting application requirements will delay the process. Also, be sure to shop around and compare multiple lenders. Doing so ensures you find the best unsecured business loan for your needs.

Frequently asked questions

Applicants must meet a lender’s requirements for an unsecured business loan, including credit score, time in business and revenue. You won’t need collateral for an unsecured loan, but applicants need to prove business ownership and supply a variety of financial and personal documents.
Yes. Many banks offer unsecured business loans. Keep in mind that they often have stricter requirements for approval than an alternative lender. The underwriting process is also longer.
Each lender has their own requirements for an unsecured business loan, but typically requested documents include tax returns, balance sheets, a business plan, a credit report and personal and business financial statements.