6 Things Commonly Required by a Business Lender



If you are seeking to borrow money for your business, prepare ahead to provide your lender with a clear picture of your commercial enterprise, advises Victory State Bank.

To accomplish this, you will need to share an up-to-date set of financial and production records.

As explained by the American Bankers Association® (ABA), financial statements should include a balance sheet, an income statement, a statement of owner equity, and historical and projected cash flows.

If possible, the borrower should provide three to five years of data, ABA advises.

To assist you in preparing to meet with a lender, Victory State Bank, the only community-based commercial bank on Staten Island, is sharing some tips from the ABA. The lender generally requires the following financial data and supporting information; however, when approaching a lender, the borrower should ask specifically which types of financial information to provide:

  • A current balance sheet with supporting schedules and inventories (essential).
  • A record of earnings for three years.
  • A projected cash flow; if a major change in the business is anticipated, a transitional and normal operating year projected cash flow may be required, with sensitivity analysis concerning price, cost, and capital acquisition investments.
  • A good set of records showing production plans, short- and long-range goals, and procedures for implementation and evaluation.
  • Information concerning personal debt, including credit cards.
  • Information concerning the amount and stability of outside-of-business income.

Just as you, the borrower, have a "wish list" of traits that a good lender should have, lenders also have certain expectations of a desirable borrower, the ABA says. Here are four key things you can do to help build your relationship with your banker:

§  Arrange credit in advance. Don't inform your lender of a major decision "after the fact." This destroys trust and credibility and makes future credit more difficult or even impossible to obtain.


§  Allow your lender time to review plans and make suggestions. Many major purchase decisions are made on the basis of emotion. A lender can be a source of sound advice and counsel in reviewing your credit request. Remember: an explanation of goals and plans builds confidence and trust. It also strengthens the working relationship.


§  Inform your lender of problems and changes. Even the best businesses are faced with adversities that reduce their ability to repay. Inform your lender of changes in plans or unforeseen problems that will interfere with making loan payments. Remember: communication is important not only in the initial request but throughout the whole credit process.


§  Maintain a high level of integrity. If the borrower expects a lender to be honest and above-board at all times, then the lender is entitled to the same attribute from the borrower. Inaccurate information and failure to honor commitments will jeopardize the borrower-lender relationship and could do harm that will last a lifetime.



VSB Bancorp, Inc. (OTCQX: VSBN) is the one-bank holding company for Victory State Bank. As Staten Island, N.Y.’s only community-based commercial bank, Victory State Bank operates five full-service locations on the Island, including the main office in the community of Great Kills and branches in West Brighton, St. George, Dongan Hills and Rosebank.

A planned sixth branch, to be situated in Meiers Corners, has received both regulatory and building department approvals.

For additional information, Victory State Bank may be reached at 718-979-1100, or visited online at www.VictoryStateBank.com.

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