When applying for business financing, lenders often require personal guarantees from individuals who own 20 percent or more of the business. A guarantor agrees to personally stand behind the loan, which provides additional assurance that the debt will be repaid.
To evaluate a guarantor’s financial strength, lenders typically request:
- Two years of personal tax returns
- A current Personal Financial Statement
- A completed loan application
Personal tax returns provide insight into income consistency, overall financial trends, and existing obligations. A Personal Financial Statement offers a snapshot of assets and liabilities, including real estate, investments, savings, and outstanding debts. Together, these documents help lenders assess liquidity, net worth, and repayment capacity.
The loan application itself gathers essential information about the borrower, the business, and the purpose of the financing request. Accuracy and completeness are important, as missing details can slow down the review process.
Preparing these documents in advance can streamline approval and demonstrate financial organization. It also allows for a more productive conversation with your lender about loan structure and expectations.
If you are serving as a guarantor on a business loan, the Union Savings Bank lending team can walk you through the requirements and answer any questions about what to expect during the review process. Learn more.
All loans and lines are subject to credit approval.
