How should a company prepare its business financing file?

A business financing file should explain who needs the funds, what they will finance and how the borrower expects to repay them. Its documents should support a consistent account of the business. A clear presentation helps communicate the request, but cannot replace consistency between financial information, existing commitments and projected cash availability.

Separate the need from the proposed product

Purchasing equipment, financing inventory and managing a collection delay are different needs. Before selecting a financing product, describe how the funds will be used and when the business expects related cash inflows. This creates a basis for discussing whether the proposed structure fits the operation.

Nafin's public information on business financing distinguishes document preparation from the credit evaluation performed by a participating bank. Approval remains part of the intermediary's credit process. Completing an application file therefore does not establish approval or guarantee particular terms.

The request should also explain what happens if expected sales are delayed or project costs increase. These questions help reveal assumptions that require attention before the company takes on additional commitments or offers assets as security.

Organize the supporting information

• Identity and authority: company documents, ownership information and the powers of those expected to participate in the transaction.
• Financial position: available statements and reports, with explanations of significant changes and exceptional items.
• Cash flow: expected collections and payments, underlying assumptions and differences between accounting results and available cash.
• Purpose: budgets, quotations or other records connecting the requested amount to an identifiable business need.
• Commitments: existing debt, security arrangements, leases and obligations potentially limiting future decisions.
• Operations: customer concentration, important contracts and dependence on key suppliers or resources.

Use a common reporting date and identify historical, estimated and preliminary figures. Where several versions of a report exist, make clear which version the responsible person has validated. This discipline makes follow-up questions easier to answer without repeatedly rebuilding the entire application or introducing new inconsistencies.

Review more than the interest rate

Two proposals can have similar rates while affecting the business differently. Depending on the instrument, the review should address fees, collateral, default events, information requirements and contractual restrictions. The company should understand what it is agreeing to do after the funds are received.

For example, a business with seasonal revenue needs to understand how its expected collections align with the proposed repayment pattern. An optimistic sales forecast should not be the only scenario considered. Alternative assumptions help make additional liquidity needs visible before a commitment is made.

The output can be a list of terms requiring clarification and decisions needing internal authorization. Assigning responsibility for ongoing obligations is also useful. Preparing the application and administering the eventual financing are connected stages of the same business process, rather than separate tasks ending at signature.

Frequently asked questions

Do all banks request the same documents?

Not necessarily. Requirements depend on the intermediary, product and applicant. An organized file helps adapt the request, but the definitive list should be confirmed with the institution evaluating the proposed transaction.

Do projections prove that a company can repay?

No. Projections are estimates based on assumptions. Their value lies in making those assumptions visible, comparing them with available information and understanding how outcomes change under different scenarios.

Next step: prepare a financing and banking discussion around the intended use of funds, expected cash flow and existing commitments. The assessment should reflect the specific business and instrument under consideration.