Liquidity plays a critical role in business loan approval—especially for loans tied to real estate investment, new construction, or rehab projects. These loans typically require larger capital contributions and are not built around low-down payment structures. That means borrowers must be prepared to demonstrate they have the liquid assets needed to complete and carry the project.

Here’s what lenders are generally looking for:

• Cash to close, which includes the down payment and estimated closing costs
• Reserves equal to at least 6 months of payments at the full loan amount
• For rehab or new construction loans, an additional 10% of the budget in liquid reserves, plus any borrower-funded portions of the project

Showing proof of liquidity reassures lenders that you can handle cost overruns, delays, or changes in the market. You’ll typically provide recent statements for any account being used to meet the liquidity requirement.

Having your finances organized and clearly documented not only speeds up approval—it shows you’re a prepared and reliable borrower.