How to Prepare Your Business for a Commercial Loan Application: What Lenders Actually Look At
One of the more practical ways a CPA adds value to a business — often underappreciated — is in helping clients prepare for financing. Whether you're looking to purchase commercial real estate, expand operations, acquire equipment, or fund a business acquisition, a well-prepared loan application can mean the difference between an approval and a frustrating decline.
Having worked in commercial lending prior to my role at Cerazy Mitchler Corporation, I've sat on both sides of this conversation. Here's what lenders are actually looking for — and what you can do to strengthen your position.
Clean, Current Financial Statements
Lenders want to see financial statements they can rely on. For most commercial loan applications, this means Notice to Reader (NTR) or Review Engagement financial statements prepared by a CPA — not internally generated statements from your bookkeeping software alone.
Ideally, you'll have at least two to three years of statements available. If your financials are several months out of date, or have not been prepared by a licensed CPA, this can slow the process or raise questions about the reliability of your numbers.
Demonstrated Debt Service Capacity
Lenders want to know one thing above all else: can this business make the payments? This is assessed through your Debt Service Coverage Ratio (DSCR) — essentially, your earnings available to service debt relative to the debt payments required.
A good CPA can help you understand your current DSCR, identify whether adjustments to your compensation structure might improve it, and present your financial story in a way that reflects the true economic performance of the business — including add-backs for owner compensation, one-time expenses, and non-cash items.
A Clear Business Narrative
Numbers tell part of the story. Your accountant can help you articulate the rest. Lenders often want to understand the nature of your business, your industry, your customer base, and your growth trajectory. A concise, professional business summary — paired with strong financials — is a compelling combination.
Tax Compliance
Lenders will typically ask whether your corporate taxes are filed and any outstanding balances paid. CRA arrears or unfiled returns are significant red flags in a loan application. Before you approach a lender, ensure your tax filings are current and any liabilities are addressed.
The Right Professional on Your Side
When applying for commercial financing, having a CPA actively involved in the process — not just as a preparer of historical statements, but as an advisor who can respond to lender questions and help structure your application — makes a meaningful difference.
At Cerazy Mitchler Corporation, we've supported clients through everything from equipment financing to commercial mortgage applications. We understand what lenders look for and how to present your business in its best financial light.
If financing is on your horizon, it's worth having a conversation with us before you approach a lender. Reach out to book a complimentary discovery call.