Before You Apply: Preparing for a Business Loan or Line of Credit

Many businesses will need access to capital to operate efficiently and pursue new opportunities. A business loan or line of credit can provide the financial flexibility needed to invest, manage cash flow, and plan for the future. Understanding when financing is appropriate—and how to prepare—can help business owners make informed decisions and streamline the application process.

When a Business Loan May Make Sense

A business term loan is disbursed as a one-time lump sum, so it is best suited for upfront and defined investments. A loan will allow your business to spread the repayment cost over time while putting your investment to work immediately.

Common uses for a loan: Real estate, or large purchase or upgrade of equipment, vehicles, or technology for your business. 

When a Business Line of Credit May Make Sense

Lines of credit are a practical option for ongoing needs or a strategic financial tool to fund expansion efforts. 

Common uses for a line of credit: Even well run businesses can experience timing gaps between expenses and incoming revenue. A business line of credit provides flexible access to funds to help manage these fluctuations. Payroll, inventory, financial emergencies, or expansion efforts, such as opening a new business location, are other common uses of a business line of credit. 

How to Prepare for a Business Loan or Line of Credit at First Hawaiian Bank

Preparation is key to a smooth application process. Taking the following steps can help us better understand your business and financing needs.

Get Organized: Gather the Paperwork Typically Required at FHB

Having documentation prepared in advance can help expedite the review process. While requirements can vary, businesses are commonly asked to provide:

Business Information
•    Business Federal Tax ID or Employer Identification Number (EIN)
•    Business entity type
•    Business entity documents
•    Business license
•    Certificate of Existence (Guam/Saipan)
•    Social Security Number (Sole Proprietorships and Guarantors)

Tip for Hawaii businesses: Make sure your registration with the Department of Commerce and Consumer Affairs is up to date. This will help avoid delays or any back and forth with underwriting. 

Financial Statements
•    Business owner/guarantor's personal financial statements and tax returns from the past two years
•    Business financial records such as a profit and loss statement, balance sheet and cash-flow statement
•    Stated gross annual revenue figure
•    Business tax returns from the past two years
Try our business loan questionnaire.

Partnering With Your Bank

Business financing works best when paired with a strong banking relationship. Be clear about the purpose of your loan and your banker can help evaluate your needs, explain available options, and guide you through the application process—from preparation to funding. Make an appointment with a banker here.