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How to build a financing dossier: the business loan documents you need
Noémie Kempf
May 15, 2024
4 min

The plans & documents needed for a business loan

Whether you’re just launching your first commercial activity, strengthening an existing business, or growing as fast as possible, you'll need regular funds to support your ambitions. 

Ideally, customers will supply the majority of cash in the long term. But financing is absolutely crucial at the outset, and incredibly helpful moving forward.

This comprehensive (and often tedious to compile) stack of documents lets you obtain the funds you need from a bank, lending provider, or private investor

But in practical terms, how do you put together a financing dossier? What are the steps to follow and the documents to include? In this article, we tell you what to do (and what less time-consuming alternatives there are). 

What is a financing application? 

The financing file is the key to obtaining a loan or funds to support your company's activities. It can support a variety of projects: opening a subsidiary, launching a new product, going international, or investing in new campaigns. 

The finance application itself helps you present your project and convince the lender of its merits and future profitability (and therefore your ability to repay your debts). It must be prepared carefully to give yourself the best chance of securing the funds you need. 

It's also a good way of putting your ideas on the table, structuring your project, and assessing your company's strengths and weaknesses, both internally and in comparison with the rest of the market. 

Enough preamble. To give yourself the best chance of success, you need to know the rules and best practices to prepare an effective application. And then we’ll see how you can make this (typically) tedious process much faster.

What do I need to apply for a business loan?

Putting together a financing package takes work. You need to comprehensively present your company and the project you want to finance. You also need to compile supporting documents to show the people behind the company, the validity of your projections, and your financial solvency

Not all business loan applications are the same, but here are three steps to follow to put together a robust application. 

1. A business plan

The first step in your financing application is to prepare a business plan. This document is not only required when setting up a new business. You'll also likely need one if you're refinancing, or in the event of a takeover, for example. 

To put it together, you will need to include a number of documents, including: 

  • An executive summary (i.e. a summary of your business and your company's objectives
  • A more detailed presentation of your business (including opportunities for growth, potential obstacles and your main competitive advantages)
  • A market study to help funders assess the potential of your business and the strength of your market
  • An analysis of your direct and indirect competitors, to show your strengths and weaknesses in relation to them
  • Presentation of your marketing and sales strategy. In particular, evidence of your ability to attract and convert new prospects
  • Your business model, with an in-depth explanation of how your company generates (or intends to generate) revenue
  • A presentation of your management team. Investors prefer to fund projects led by competent, experienced people. It is therefore important to present the key members of your team, the projects they have led and the qualities that can contribute to your company's success. 

Clearly not every single one of these factors will be necessary for some financing applications. An appeal for short-term financing or working capital loans will typically be lighter and easier to prepare. But a clear business case always helps. 

2. Your financing needs

Next, you need to present clearly to your bank (or potential investor) why you need financing. And how you intend to use it. 

The financial plan is divided into two parts. On the one hand, your company's financing needs, and on the other, the resources it has or expects to have at its disposal to ensure that its business is sustainable in the long term and to repay the funds lent.

Start by taking stock of the costs involved in launching a project or developing your business. Then determine the target duration of your financing, based on the estimated time needed for the project to become profitable. Finally, assess your potential financing options. 

You could, for example, consider a traditional bank loan, or turn to alternative methods of financing such as a factoring agreement. Your choice will obviously be determined by the amount you require and the length of the loan. 

Whichever solution you choose, the next step is to present your financial forecasts — how your company hopes to perform in the future. This should clearly project the benefit you expect to see from the loan, and (most importantly) how you’ll repay it in due course. 

3. Financial and business documents

This documentation is probably the first thing you think of when compiling a financing dossier. You need to prove that your business is legitimate, sound, and solvent

These documents will also be used to assess your ability to repay the funds. You will almost certainly be asked for the following documents and supporting evidence: 

  • Proof of incorporation (and associated certificates of good standing)
  • Your credit history and potentially evidence that you’ve paid taxes owing
  • Documents proving your ability to generate cash (sales records)
  • A copy of your annual accounts (usually the last three, unless you’re a new business)
  • Proof of assets that can be used as collateral to repay your loan (equipment, stocks, property)
  • Outstanding customer invoices, and also unpaid supplier invoices
  • References from previous business partners, including good supplier relationships 

With all these elements in place, you have every chance of securing a business loan with relative ease. 

How to apply for loans faster

As we’ve seen, a financing application often requires a lot of paperwork and time. It can quickly become a real obstacle, which is particularly challenging when you need financing fast. When the need for funds arises, you’re often at a strategic moment for your business — launching a new campaign, or expanding into new markets. You don't have unlimited time for added admin.

But a few new developments are making this process faster. Most importantly, embedded finance and banking integrations let you share the information needed quickly. This helps to release funds quickly, without necessarily submitting a whole host of supporting documents. 

For example, to apply for a loan or line of credit with Defacto, you simply need to connect your banking and/or finance tools. Our system pulls the data we need to assess your application in seconds, and you don’t have to gather anything. We don’t even need a business case or financial plan — we can see your company’s strength right there in your records. 

With Defacto, you can:

  • Automate the time-consuming admin that makes most loan applications painful
  • Create an account and test your eligibility for funding in just 27 seconds
  • Complete the intuitive application process step by step. No need for a phone call or physical meeting! 

Find out if you qualify and get the funding you need in record time.

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