It’s not just about your credit score and other financial factors when it comes to getting a loan. If you want to ensure the best chances of approval, make sure your company’s financial reports are in order. Here’s what lenders look for when determining if you’re eligible for financing:

Personal Financial Statements

Personal Financial Statements are a great way to demonstrate your financial stability and ability to repay the loan. It is important for you to provide complete and accurate information, including all your assets, liabilities, income and expenses. The personal financial statement should include the following:

• A balance sheet that shows all of your assets (such as cash in checking accounts, savings accounts and investments) on one side of the page, followed by all of your liabilities (such as credit card debt or student loans) on the other side.
• An income statement showing how much money you have made over the past three years through employment or self-employment activities. In addition to salary or wages paid out during those years, this could also include bonuses earned if they were significant enough to impact personal finances positively (assuming they weren’t lost in poor investment decisions).
• A cash flow statement showing how much cash was brought into a household over several months through various sources such as employment income; selling something via Craigslist; getting paid back by friends who borrowed money from them previously, etcetera.”

Income Statement

The income statement is the most important document in financial reporting. It’s used to understand a company’s profitability or how much money it made or lost over a given period of time. The income statement also shows how much revenue and expenses were generated within that time frame. A lot of small business loans are based on this document alone, so it’s important for you to learn how to read an income statement and interpret its information correctly.

Cash Flow Statement

Cash flow is the movement of cash in and out of your business. You want to know how much cash you have and where it’s going so you can make smart decisions about how much money is available for growth and expansion, what your expenses are, and how well your business is doing.

Balance Sheet

A balance sheet is a snapshot of a company’s financial position at a given point in time. It lists the company’s assets, liabilities, and equity (the difference between assets and liabilities). A balance sheet is usually prepared annually for public companies in accordance with generally accepted accounting principles (GAAP).

For small business loans in 2022, you’ll need the income statement, balance sheet and cash flow statement. As per the experts at Lantern by SoFi, “You can generally find small business loans at banks, credit unions, online lenders, and peer-to-peer (P2P) networks. Each type of lender has unique requirements, as does each specific lender.”

With the right financial statements, your chances of getting a loan will increase tremendously. This is because lenders want to see that you have money in the bank and that you can afford to pay back what they lend you. With these reports, they will know exactly where all of their money is being spent, so there are no surprises when it comes time for repayment!