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What documents do I need to provide for business debt relief?

What Documents Do I Need to Provide for Business Debt Relief?

Dealing with business debt can be incredibly stressful. If your business is struggling to make payments or you’re worried about possible default, you may be considering options for debt relief. The good news is that there are programs available to help businesses restructure, reduce, or even eliminate certain debts. But to take advantage of these programs, you’ll likely need to provide documentation to prove eligibility.In this article, we’ll cover the key documents you should gather when seeking business debt relief. Having these materials organized ahead of time can help streamline the application process and improve your chances of qualification.

Financial Statements

One of the first things any debt relief program will want to see is a clear picture of your business’s current financial situation. This includes:

  • Tax returns – Provide personal and business returns for the past 3 years to give lenders an accurate view of your company’s performance over time.
  • Profit and loss statements – Also known as income statements, these documents list your revenue, expenses, and net income over a set period. Include P&L statements for the past 3 years.
  • Balance sheets – Balance sheets outline your business assets, liabilities, and equity at a specific point in time. Submit your most recent year-end balance sheet.
  • Cash flow statements – These reports show the money flowing into and out of your business. Like P&L statements, provide cash flow statements for the past 3 years.

Having 3 years of financial statements gives lenders a sense of trends and stability. Be sure all documents are complete and accurate.

Business Structure Documentation

You’ll also need to verify your company’s legal business structure. This requires:

  • Articles of incorporation – For incorporated businesses, this document establishes your company as a legal entity.
  • Operating agreement – For LLCs, the operating agreement outlines ownership, management, and operating procedures.
  • Business license – Submit a copy of your current business license from your state or local government.
  • EIN confirmation – Provide documentation of your Employer Identification Number from the IRS.
  • Ownership documentation – If there are multiple owners, submit paperwork showing percentage of ownership such as stock certificates.

This paperwork proves you have an officially recognized business. Make sure all registration and licenses are up to date.

Bank Statements and Accounts Payable

To assess your debts and repayment ability, lenders will want to review:

  • Bank statements – Provide 12 months of statements for all business bank accounts to document cash flow.
  • Accounts payable – Submit an aged A/P report showing unpaid vendor invoices and due dates.
  • Loan/lease documents – Include paperwork for all outstanding business loans, lines of credit, equipment leases, and merchant cash advances.
  • Default/demand notices – Provide any notices from lenders warning of potential default or demanding repayment.

This gives lenders a full picture of what you owe and to whom. Be sure to disclose all debts – it’s not worth hiding anything.

Collateral Documentation

Some debt relief programs require collateral to secure the restructured loan. If so, you may need:

  • Property deeds – For any real estate offered as collateral, provide the deed listing you as the legal owner.
  • Vehicle titles – Submit certificates of title for any business vehicles offered as collateral.
  • Equipment appraisals – If using equipment as collateral, provide independent appraisals documenting the current value.
  • Inventory lists – For inventory-backed loans, supply detailed lists with values for existing stock.

Make sure the value of any collateral sufficiently covers the loan amount per the lender’s requirements.

Other Potential Documents

Depending on your specific situation, lenders may request a few additional documents such as:

  • Business plan – For some programs, you may need to submit a business plan explaining how you will regain profitability.
  • Personal financial statements – If you personally guarantee the debt, you may have to provide personal tax returns, bank statements, etc.
  • Accounts receivable – An aged A/R report showing unpaid customer invoices can help establish collateral.
  • Appraisals – For real estate offered as collateral, appraisals help verify market value.

Don’t be afraid to ask the lender exactly what documents they require – having a clear list can prevent any last-minute scrambling!

Get Your Paperwork in Order

While it can be stressful to gather all these materials, having your financial paperwork organized is crucial when seeking debt relief. Allow several weeks to collect documents and ensure everything is up to date. You may even want to consult an accountant to review your financial statements.Be sure to make copies of all documents for your own records as well. And once you submit your application, follow up frequently to check on the status and provide any additional needed information. With persistence and an accurate application, you can improve your chances of qualifying for a debt relief program to help your business regain solid financial footing.


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