Document retention is important for your business records. These documents are commonly requested when applying for a loan or grant. It may be beneficial to scan an electronic version of these files in addition to the physical copies.
✨ Business Loan Documents Checklist ✨
This guide lists important documents to keep in your business records. These documents are commonly requested when applying for a loan or grant. It may be beneficial to scan an electronic version of these files in addition to the physical copies.
🏗️ Business Structure
👤 Sole proprietorship
- Fictitious Business Name Statement file with your county
(707) 565-3800
585 Fiscal Drive, RM 103, Santa Rosa CA 95403
ClerkRecorder@sonoma-county.org
🏦 Limited liability company or corporation
- Articles of Incorporation
- Current Statement of Information
- The above documents can be filed online on the Secretary of State (SOS) website
(916) 653-6814
1500 11th Street, Sacramento, CA 95814
👫 Partnership, etc. (all applicable items)
- Certificate of limited partnership
- The above documents can be filed online on the Secretary of State (SOS) website
(916) 653-6814
1500 11th Street, Sacramento, CA 95814
📝 Business Licenses and Permits
Your business may have several permits or licenses depending on the industry and business functions this may include sellers’ permits, business licenses, environmental health permits for food services, contractors licenses, etc. Regardless of how many permits or licenses you require, keep all current and past records.
📓 Business Plan
Although a business plan is optional a financial institution giving your business money such as a grant or loan will likely want to see a business plan. They want to see your business goals and your plan to obtain them. Business plans often include marketing information – how will you gain/retain customers, products or services pricing, financial projections including the cost of goods sold (COGS), current inventory levels, staffing cost, and owners’ salaries.
It is very common to seek out help when building a business plan, a free resource for help in this area is the Sonoma County Small Business Development Center (SBDC).
🛡️ Insurances
Insurance is a vital part of protecting your business, below are descriptions of common insurance needed. Your business functions will determine the type of insurance you need, and we recommend consulting an insurance provider for a more specific idea of the insurance required by your business.
🗃️ General liability insurance
General liability insurance is a type of business insurance under the General Liability Umbrella that helps cover claims that your company caused:
- Bodily injury
- Property damage to someone else’s belongings
- Personal injury
- Advertising injuries, like libel or slander
Other names for this coverage include commercial general liability insurance (CGL) and business liability insurance.
General liability insurance for startups is an important coverage for many small business owners. It’s an essential insurance policy to help run a successful business. Without it, you would have to cover the costs of claims out of pocket.
👷 Workers compensation insurance
Workers compensation benefits mean workers are protected if they become ill or injured as a direct result of their jobs. These benefits include medical care, physical therapy, disability payments, lost wages, and death benefits. Workers comp is based on a no-fault system, which means that an injured or ill employee does not need to prove that the injury or illness was someone else’s fault in order to receive workers compensation benefits.
All California employers must provide workers compensation benefits to their employees under California Labor Code Section 3700. If a business employs one or more employees, the business must provide workers compensation coverage for each of those employees.
In California, workers compensation benefits cover all workers including part-time employees. Failure to have workers compensation insurance in California is a criminal offense.
When an employer cancels a workers compensation policy in order to get insurance from another company or to close the business, the insurance company will return a pro-rated refund amount to the employer.
🚙 Commercial auto insurance
When you drive a car, truck or van for business purposes, you’ll want to financially protect that vehicle with commercial auto insurance. Your personal auto insurance isn’t enough and won’t cover the vehicle if you (or an employee) get into an accident while driving for business.
Commercial auto insurance can cover everything from company cars to food trucks to delivery vans.
Here’s a look at the types of coverage available with commercial auto insurance:
- Property damage liability pays for damages to another person’s property, such as their car, when you are at fault in an accident.
- Bodily injury liability pays for the injuries you cause another person when you’re responsible for an accident.
- Combined single limit (CSL) offers one limit for property damage claims and bodily injury claims.
- Collision insurance pays for damage to your business vehicle when it hits another car or an object, such as a pole.
- Comprehensive insurance pays for damage caused by weather, fire, falling objects (such as tree branches) and other problems. It also covers vehicle theft.
- Medical payments and personal injury protection (PIP) pay for the cost of medical care for you and your passengers, no matter who was at fault.
- Uninsured motorist coverage pays for your and your passengers’ injuries if your vehicle is struck by an uninsured driver.
Source: Forbes.com/advisor
This information is not advice and you should always consult an insurance professional for questions and customized coverage for your business.
💳 Business Taxpayer Identification Number
Your state tax ID and federal tax ID numbers are also known as an Employer Identification Number (EIN). This number will work as a social security number for your business. They let your small business pay state and federal taxes.
An EIN is also required for opening a bank account, credit card, etc. If you have an EIN you should have received an EIN Assignment Letter from the IRS, it is good to keep the letter on file handy for when requested.
If your business is a sole proprietorship without employees who aren’t required to file any excise tax return and haven’t established a pension, profit-sharing, or retirement plan you do not need an EIN. Instead, you may use your social security number.
If your business does not meet the description in the above paragraph and you do not currently have an EIN you can apply for one with the IRS. There is an online application available, in some cases, you can receive an EIN Assignment letter instantly after filling out the online form.
💰 Personal and Business Financial Statements
If you are a sole proprietorship or in business for less than two years you may be asked for personal financial information in addition to the business financial information.
Financial information may include but is not limited to bank statements, past years’ taxes filed, profit and loss statements, balance sheets, etc.
Past tax fillings and financial reports such as profit and loss statements and balance sheets can be requested from your Certified Public Accountant (CPA). If you are not working with a CPA, we recommend you obtain tax services as soon as possible. Delaying filing or organizing tax documents can have serious financial and tax consequences and may make you ineligible for loans or grants depending on requirements.
✔️ Proof of ownership
Depending on the type of business you are operating (sole proprietor, LLC, C-corporation, S-corporation) proof of ownership may vary. Acceptable forms of ownership may be articles of incorporation, a legal document such as an operating agreement, or tax returns with a Schedule C.