Your income statement and balance sheet will only get you to the starting line with lenders. But, sharing more data, like metrics and KPIs, that you use to drive your business can help paint a complete picture of how your business is performing. Of course, understanding the drivers of your business is a test administered by lenders – and you don’t want to fail. But, knowing your data can inspire confidence that you understand how your business works, where the funding can be used, and how you’ll keep the money safe.

It doesn’t matter whether you’re doing simple cash accounting or fancy GAAP accounting with most lenders. What matters is that you have accurate data and can explain what the numbers mean. (This is certainly true of modern debt providers, like our alternative financing partners in INTRO.) 

That said, each lender differs in what they’ll want to see to be comfortable lending money to your business. In the case of financial statements, some lenders may ask for export from your accounting system, but other, more conservative, lenders may require a full third-party audit of the numbers before funding. The formality and amount of documents they’ll need will vary wildly, but don’t be overwhelmed. Here’s the minimum you should have prepared:

• Articles of Incorporation — This is a document that proves you’re a real business. If you don’t have this, ask your lawyer.

• Financial Statements — If you don’t have a few years of history, send what you have. You can usually export the following financial statements easily from your accounting system:

  • Balance Sheet

  • Income Statement

  • Cash Flow Statement

• Metrics or KPIs — Make sure you explain how you’re calculating metrics and how they drive business decisions. It’s imperative to know how your metrics may differ from industry standards as we see in SaaS. (We explore metrics in other posts).

• At least a 12-month forecast — More on this here.

You most likely have some form of these that you’re using already. Make them presentable and clear. It bears repeating that you may be asked for more information depending on the lender and financing instrument. Still, the above is a solid baseline to have clean, concise and prepared to be conversational with.