• Calla Norman

Personal Financial Moves You Need to Make Before Applying For a Loan


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When you’re seeking out a loan for your small business, often lenders are going to want to look at you under a microscope to see if you’re a good fit for a loan. You might be thinking, “Hold on, what about church and state? Why is my personal business up for inspection?”


Well, in the small business world, often a business owner’s personal finances are a good indicator of how they run their business. It also helps lenders know whether they have any assets that they could put up for lien to strengthen their loan. Read on to find out how you can get your personal finances in order to get prepared for a loan application.


What personal financials do I need to show a lender?


Your personal assets


You’ll need to list the valuable assets that you have to your name when you’re applying for a loan. This includes a house, car, other property, valuable jewelry, and other similar things. The reason lenders ask for this information is if you want to place a guarantee for your business (and possibly lower the interest rate), you can put these assets up. If you have any investments - stock in a company, a 401k or retirement plan, equity in another business, anything like that, you should list it.


Your personal liabilities


Do you have any outstanding debts you haven’t paid off? Credit cards, medical debt, student loans, car payments are all examples of personal liabilities that you should list on your loan application.


Sources of additional income


If your business isn’t the only thing you do to bring in money, you should list it in your application as well. This could include any consulting you might do for extra cash, another business you own, or your day job, if you have one. If your spouse works outside of your business, you should also list their income as well, because it can help lower your interest rate or get your application across the line.


What are my personal finances used for? Who gets to see it?


The personal information you share with a lender is used for what’s known as “credit analysis” - it’s just to get an idea of what your financial situation is before a decision is made to lend to you.


After you share the personal financial information listed above, it’s shared with a small team of underwriters who look at it in combination with your business’s books in order to make a decision. The public never gets to see your financial laundry, dirty or otherwise, and it is kept secure by our team.


Small business funding that looks at you for you


The difference between Honeycomb’s credit analysis process and a bank’s is that we look at the whole picture when reviewing a loan application. While an aspect of your business’s makeup might cause a bank to reject your application, that’s not necessarily the case with us.


Find out more about Honeycomb crowdfunded small business loans by filling out the form below.