What to Include in Credit Applications

Despite the fact that there are more tools than ever to help establish the most efficient credit limit possible, the most important tool is still your own credit application. But since there isn't really an official, formal, and standardized credit application for all credit grantors, we often find ourselves borrowing from the credit application of fellow credit/finance executives. Nevertheless, there is still no better or more complete source of information than the credit application for determining the creditworthiness of a new account.

While many of the terms on the credit application may seem like common sense, you'd be surprised how many of us simply forget to include one of more of the following key items. Be sure the credit application includes at least:

1) Complete and legal company name
2) DBAs
3) Physical street address
4) Mailing address
5) Phone, fax, email and website addresses
6) Officer's complete names and personal addresses, with phone, fax and email addresses
7) Latest audited financial statement with auditor's notes (if it's a new company, get pro forma statements)
8) If no audited financial statement is available, include a blank financial statement with signature line and date so the debtor can authorize that the information provided in the financial statement he or she completed is correct.
9) Five trade references with a section for physical street addresses, phone and fax numbers, contact names and email addresses
10) Bank references with physical street addresses, phone, fax, contact names, account numbers, balances on all accounts
11) Type of company (corporation, proprietorship, limited partnership, etc.)
12) Federal I.D. number of corporation or SS# of all owners if a proprietorship or partnership
13) Personal guarantee section with signature and date lines for all officers, along with addresses, phone and email addresses of all officers

Also, include questions such as:
14) Have you ever filed bankruptcy (corporate or personal)?
15) Have you now or have you ever had a judgment or lien filed against you?
16) Do you have or have you ever had any SBA loans outstanding?
17) Are you currently delinquent on any outstanding loans or trade credit?
18) Have you ever owned or been part owner in another company? If so, please furnish the complete legal name, address and any DBAs of that company.

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