Do you have a vision for your business to expand and achieve the greatness you know it is capable of attaining? Are you seeking an SBA guaranteed loan for your small business to help you realize this objective? You may be wondering how to go about getting this type of loan. There are many stages in the application procedure, and they vary depending on the type of program and assistance you are seeking. Let’s break down what this process entails.
Many programs and loan types expect business plans, credit checks, various forms of licensing and certificates, company charters, and other documents. It can be a very bureaucratic process, with lots of paperwork, red tape, and waiting for answers once the necessary materials have been compiled. Of course, you probably anticipated this—no one said it would be easy! Lenders can sometimes help business owners select programs that suit their businesses’ needs and navigate the system. After all, these lending institutions are benefiting from having these loans backed by the government, and they are receiving business from the borrowers, so they have an incentive to do most of the work on the recipient’s behalf. What’s more, they should be intimately familiar with the process, and business owners can use their expertise to their advantage.
As a general rule, the more information the prospective borrower includes in his or her application, the better of a shot he or she is likely to have at being approved. Include the history of your business, the experience of the owner, a plan for how the proceeds will be used, a timeline for how and when it will be repaid, the amount needed, any ways in which the business will serve the SBA’s goals, and any aspects of personal character that may reflect favorably upon you. When including personal information, think of it as approaching a professional position. Consider including a portfolio, résumé, CV, references, and any examples of skills and experience. Talk about the business itself–where it is located, what products or services it offers, what competitors it has, who the employees are, who clients of the business are, and a trajectory of the business’s past and future. Financial statements from major shareholders should also be included.
Because SBA loans are much more flexible and usually allow for much lower credit and security standards than traditional loans, they have more stringent standards when it comes to personal character and responsibility. Business owners must demonstrate their competence and reliability in order to be approved.