Merchant Loan Application Checklist for Startups

Starting a business is exhilarating, and terrifying. One day you're dreaming about your concept, the next you're facing the harsh reality of needing capital to make it happen. Equipment costs more than expected. Inventory requires larger deposits than you budgeted. Marketing eats cash faster than you imagined. Suddenly, that business plan you crafted with optimism meets the unforgiving calculator of actual startup costs.

Merchant loans (including merchant cash advances and short-term business loans) can provide the capital startups need, but only if you apply correctly. Startups face unique challenges: no lengthy business history, limited revenue track records, and often, founders with more passion than polished financial statements.

Here's your complete checklist for applying for merchant loans as a startup. Get these items organized before you hit "submit," and you'll dramatically improve your approval odds while speeding up the funding process.

Your Personal Financial Documents

As a startup, your personal finances matter a lot. Lenders can't evaluate your business track record because you don't have one yet. Instead, they evaluate you, the founder.

✓ Personal Credit Report (Check It First!)

Pull your personal credit report before applying. Most merchant lenders want scores above 600, with 650+ significantly improving your odds. If you discover errors, dispute them immediately, corrections take weeks.

Why it matters: Your personal credit substitutes for business credit you haven't built yet. A 720 score opens doors, a 580 score closes.

✓ Personal Bank Statements (Last 3-6 Months)

Lenders want to see your personal financial stability. Can you contribute to the business if needed? Do you manage money responsibly? Are you living paycheck-to-paycheck or maintaining healthy reserves?

Clean them up: Remove or explain any overdrafts, large unexplained deposits, or obvious financial mismanagement before submitting.

✓ Personal Tax Returns (Last 1-2 Years)

These demonstrate income stability and your ability to contribute personally to your startup if necessary. If you've been employed while launching your business, these returns show you have financial capacity beyond the startup itself.

✓ Personal Identification

Government-issued ID (driver's license or passport) proving you are who you claim to be. Obvious requirement, but startups often overlook this in their rush to submit applications.

Your Startup Business Documents

Even brand-new businesses have some documentation. Gather everything that proves your business exists and has a plan.

✓ Business Formation Documents

• LLC or Corporation: Articles of incorporation or organization filed with your state
• Sole Proprietorship: Business license or DBA (Doing Business As) registration
• Partnership: Partnership agreement outlining ownership structure

Why it matters: Lenders need to verify your business legally exists. Operating without proper formation raises red flags about your professionalism.

✓ EIN (Employer Identification Number)

Your federal tax ID number from the IRS. If you don't have one yet, get it before applying.

Pro tip: Even sole proprietors benefit from having an EIN instead of using Social Security numbers on business applications. It protects your personal identity.

✓ Business License and Permits

Whatever licenses your city, county, or state requires for your industry. Restaurant health permits, retail business licenses, contractor certifications, whatever applies to your specific business.

Missing these? Get them immediately. Operating without required licenses kills applications instantly and raises legal concerns.

✓ Business Bank Account Statements

Even if you just opened your business account last month, provide whatever statements exist. Lenders want to see:

• Business and personal finances are separated (not commingled)
• Deposits showing revenue generation (even if small)
• Responsible account management (no overdrafts)

Startup tip: If you haven't opened a business bank account yet, do it before applying. Operating through personal accounts screams "hobby," not "serious business."

Your Business Plan and Revenue Documentation

Startups can't show three years of financial history, but they can show planning, preparation, and early traction.

✓ Business Plan (Simple Version)

You don't need a 50-page MBA-worthy dissertation. Create a clear 3-5 page document covering:

• What you do: Simple explanation of your product or service
• Target market: Who are your customers and why do they need you?
• Competition: Who else does this and how are you different?
• Revenue model: How do you make money?
• Financial projections: First-year revenue and expense estimates
• Use of funds: Exactly what you'll do with the loan

Keep it real: Lenders have seen thousands of business plans. They spot BS immediately. Be honest about challenges and realistic about projections.

✓ Credit Card Processing Statements (If You Have Sales)

If your startup is already generating sales, even small amounts, provide processing statements from Square, Stripe, PayPal, Shopify Payments, or wherever you take payments.

Why it matters: Early revenue proves concept validation. A startup doing $3,000 monthly after two months in business demonstrates more viability than a startup with zero sales after six months.

✓ Sales Projections and Evidence

Back up your projections with evidence:

• Pre-orders or signed contracts
• Letters of intent from potential customers
• Proof of concept sales (friends/family don't count, real customers do)
• Market research showing demand

Example: "We project $15,000 monthly revenue by month six. We've already secured two contracts totaling $4,500 monthly (contracts attached), and have active conversations with five additional prospects."

Evidence-backed projections beat hopeful guesses every time.

Your Collateral and Investment Documentation

Startups often lack traditional collateral, but showing personal investment and available assets strengthens applications.

✓ Personal Investment Documentation

Show how much you've personally invested in your startup:

• Bank transfers from personal to business account
• Equipment purchases using personal funds
• Credit card statements showing business expenses you covered personally

Why it matters: Lenders want to see you have "skin in the game." If you don't risk your own money, why should they risk theirs?

Ideal scenario: "I've personally invested $12,000 to date covering initial inventory, website development, and business formation costs (receipts attached)."

✓ Available Collateral List

Even startups have some assets:

• Equipment you've purchased (computers, machinery, tools, vehicles)
• Inventory currently in stock
• Accounts receivable from early customers
• Intellectual property (patents, trademarks)

Create a simple spreadsheet listing assets with current market values. This isn't just for secured loans,it shows you're operating seriously with real resources, not just ideas.

✓ Personal Assets (For Secured Loans or Personal Guarantees)

If you're willing to pledge personal assets or provide personal guarantees:

• Home equity documentation
• Vehicle titles
• Investment account statements
• Other valuable personal property

Caution: Only pledge what you can afford to lose. Personal guarantees mean your personal assets are at risk if the business fails.

Your Financial Projections and Use of Funds

Startups must articulate exactly how they'll use borrowed funds and generate returns to repay them.

✓ 12-Month Cash Flow Projection

Create a simple month-by-month projection showing:

• Expected monthly revenue
• Expected monthly expenses
• Loan payment obligation
• Net cash flow each month

This demonstrates you've calculated whether you can afford the loan, not just whether you want the loan.

Reality check: If your projections show negative cash flow in months 1-4 before breaking even, acknowledge this and explain how you'll bridge those months (personal funds, existing capital, etc.).

Additional Items That Strengthen Startup Applications

These aren't always required, but including them separates professional applications from amateur ones.

✓ Professional References

Letters from:

• Industry mentors or advisors
• Early customers praising your product/service
• Suppliers willing to work with you
• Professionals in your network vouching for your capability

✓ Owner Resume

Your professional background matters for startups. A resume showing 10 years of restaurant management experience strengthens a restaurant startup application. Relevant experience reduces perceived risk.

✓ Photos and Proof of Operations

Include photos showing:

• Your physical location (if applicable)
• Inventory or equipment you've already acquired
• Your product or service in action
• Your team (if you have employees)

Visual proof that you're operational (not just dreaming) builds credibility.

Before You Hit Submit

Run through this final checklist:

• All documents are clearly labeled and in PDF format
• Business name is spelled identically across all documents
• Revenue figures in your application match your documentation
• Contact information is current and matches all documents
• You've reviewed everything for typos and errors
• Any unusual circumstances are explained clearly (don't make lenders guess)
• You can articulate your funding need and repayment plan clearly if they call

The Startup Advantage

Yes, startups face challenges that established businesses don't. But you also have advantages: flexibility, hunger, and the ability to move fast without bureaucratic inertia. Lenders who specialize in merchant loans often prefer motivated startup founders over complacent established businesses.

Your job is proving you're the organized, prepared, strategic kind of startup founder, not the hopeful dreamer who hasn't thought beyond the idea phase.

This checklist gets you there. Every item you have ready increases your approval odds and accelerates your funding timeline. Every item you're missing creates delays, questions, and potential denials.

Take the time to get it right. Your startup deserves every advantage you can give it, and a complete, professional loan application is one of the best advantages you can create.