Most small business owners start thinking about loan options when they need money. Financial pressure tends to hit unexpectedly, from slow quarters, unexpected equipment failure, or a growth opportunity too good to ignore. Suddenly, those business owners are scrambling to look at options and pull together documents while hoping for the best.
It’s a pattern Tanner Cupello, VP of Marketplace Sales at Lendio, sees constantly. Businesses look strong for months, then one slow month hits and owners tell themselves everything is fine (until it’s not). By the time they ask for help, the last few months on paper don’t look great, and lenders are seeing a business that isn’t trending in the right direction.
“Apply before you think you need it,” says Tanner. “Look ahead one, three, six months for any big projects, a slow season, equipment on the horizon, and back it up three to four months so you’re securing funding while your business is still healthy.”
Lendio has worked with over 75 lenders for small business for over a decade, and that experience teaches us a lot. Most importantly, we’ve learned that the owners who get approved quickly, and with better terms, aren’t usually the scramblers. Instead, they’re the ones who are running their business in a way that looks good to a lender. Oftentimes, those business owners are accomplishing this without realizing it.
If you’re a small business owner or entrepreneur, there’s a good chance you’re further along in loan readiness than you think. Let’s break down what lenders actually want to see, and how your existing setup maps to it.
How lenders read your business.
Lenders don’t make decisions based on a single moment, and they definitely don’t just look at your credit score and call it good. The wealth of documents and business financials required for a loan help lenders assess patterns. They’re looking for consistent revenue, predictable cash flow, reliable payment behavior and clean financials. Across the lending landscape, the core factors that drive approval are fairly universal:
- Cash flow consistency: Does money move through your business regularly and predictably? Do your statements show a reasonable number of regular deposits, not just a few big ones?
- Revenue stability: Are your monthly numbers telling a coherent story over time?
- Personal and business credit: How have you handled debt and obligations?
- Time in business: How established and resilient is your operation?
- Clean documentation: Can you quickly produce business bank statements, a P&L, and tax returns?
Here’s why small business owners are most likely further along in loan readiness than they think: Several of these factors are already being built inside your account every month.
How Lili Can Help Small Business Owners Get Loan Ready
If you’re already banking with Lili, parts of your loan prep are happening in the background without any extra effort. Here’s where your existing setup maps directly to what lenders want to see.
Clean business bank statements
Lenders routinely request three to six months of business bank statements. What they’re looking for isn’t just numbers, it’s clarity. Mixed personal and business transactions, irregular deposits, and unexplained gaps all create friction in the review process. But beyond organization, the numbers themselves tell a story too.
“Pull up the last three, six, or twelve months of your bank statements and ask yourself: what’s my average balance? If that number is $1,000 and a lender needs to pull a $1,000 or $1,500 monthly payment, they’re going to wonder if you can actually support it. Showing a healthy average balance is a positive signal. It tells lenders there’s less risk in saying yes.” – Tanner Cupello, VP of Marketplace Sales, Lendio
A dedicated Lili business checking account keeps your business activity clean and separate from day one. Every transaction is timestamped, categorized, and accessible. When a lender asks for statements, you’re not hunting through a personal account or trying to explain why your Netflix subscription appears next to a vendor payment.
Profit & Loss documents
One of the most common document requests in loan underwriting is the profit and loss statement, and it tends to trip up plenty of small business owners. “Basic documents, like a profit and loss statement and a debt schedule may seem simple, but they’re often harder to pull together in the moment”, says Tanner Cupello, VP of Marketplace Sales at Lendio. “Having the basics ready can make all the difference.”
Lili Smart users can generate P&L on demand, built automatically from categorized transaction data. You won’t have to muddle through a spreadsheet or call your accountant to be able to issue this documentation quickly when the need arises.
*Access to capital is provided by our partners that offer business loans or line of credit. Lili is a financial technology company, not a bank or lender. Underwriting required.
Invoicing history
Lenders care deeply about cash flow consistency. If you’re using Lili’s invoicing tools to send and track payments, you’re building a documented record of revenue activity over time. When money comes into your business, how reliably clients pay, and how you manage the gaps. This pattern is what lenders want to see to make an informed decision about your business.
Bill payment records
Lenders also look at how you manage outgoing obligations. Lili’s Bill Pay feature keeps your vendor and supplier payments organized and scheduled in one place. Consistent, on-time payment behavior gives lenders a clearer view of how you manage financial commitments and run your business day to day.
Finishing the picture lenders want to see.
Even with everything Lili offers to get you ahead of the game, there are a few loan readiness steps that live outside any banking platform.
Personal credit still matters. For businesses under two years old, lenders often lean heavily on the owner’s personal credit score. Pull your personal credit report, check for inaccuracies, keep revolving balances low, and set up automated payments if you haven’t already. Small, consistent habits move the needle over 60–90 days, and the best time to focus on improving your personal credit score is before you need financing.
The longer-term play is reducing the reliance on personal credit score altogether. As your business credit profile matures (with established tradelines, a documented payment history, and a verifiable D&B score) lenders have more to work with beyond your personal score. That shift doesn’t happen overnight, but building business credit is a strategic move for your long-term borrowing power. Lili’s BusinessBuild program is built exactly for this purpose.
Tax returns are important for traditional financing. Lenders typically want two years of business tax returns, plus personal returns for owners. Some financing types don’t require these, but they’ll be necessary for most traditional products, like term loans or SBA loans. Lili’s bookkeeping can keep your books tax-ready throughout the year, but the returns themselves need to be filed, and ideally reviewed by your accountant before you apply.
Know your use of funds. Lenders want to understand what the money is for. The detail you should have often surprises people. This is not a vague answer, but a clear, specific purpose tied to your business. A one-paragraph summary of how you’ll use the capital, and why the amount makes sense, goes a long way in any application.
“A lot of business owners come to us not exactly sure what their financing needs to accomplish. Are you looking to expand, consolidate, buy a building, or just build a financial cushion? Define that first. It’s one of the most important parts of this process. If you’re not sure exactly what your goal is, you’ll be presented with options quickly and find yourself overwhelmed, unsure how you would deploy that capital even if you got it tomorrow.” – Tanner Cupello, VP of Marketplace Sales, Lendio
A 60/90 day loan readiness plan.
If you’re targeting a loan application in the next few months, here’s a simple sequence:
Right now:
- Confirm all your business transactions are running through your Lili account (not mixed with personal)
- Enroll in BusinessBuild if you haven’t yet. The earlier you start, the more history you build
- Pull your personal credit report and check for errors
In the next 30 days:
- Generate a P&L from Lili and review it. Does it accurately reflect your business?
- Get 3–6 months of bank statements organized and saved
- Draft a one-paragraph use-of-funds statement. Go into as much detail about uses, especially if you intend to use funds for more than one purpose.
In the next 60–90 days:
- Confirm your business is registered consistently across agencies (name, address, EIN)
- Check your D&B PAYDEX score in your Lili dashboard and know where you stand
- Gather your last two years of business tax returns
When you’ve worked through this list, you won’t just be applying for a loan. You’ll be walking in as a prepared borrower with a clear financial story.
Next steps: Apply for financing
Once you’re ready, the last thing you want is to apply to lenders one by one, each with their own forms, their own credit pulls, and their own timeline. Lili has partnered with Lendio to give users access to the largest small business lending marketplace in the U.S. right within the Lili platform, featuring 10+ loan products from large and small SBA loans to lines of credit and term loans, all from within your Lili account.
The preparation work you put in here translates directly into better matches, faster decisions, and stronger terms. Lenders respond to borrowers who show up ready.
