Have you started a new business or do you want to expand your existing business? An
SBA loan may be the best way to secure the financing you need for your small business. In order to qualify for an SBA loan you must first apply to traditional lenders for financing and they must turn you down for the loan. Once this happens, you will be able to send in your request for an SBA loan.
What can you expect when you apply for an SBA loan? Like a traditional loan, you need to be prepared to provide information pertaining to your business credit along with information about your personal credit. This allows the SBA to see how you are able to manage your finances and what type of risk you pose. If they feel that you may default on the loan or your risk is too great, they will turn you down for the loan or they will only approve you for a very low amount.
In order to help the SBA make their decision on the SBA loan, you need to be prepared with a few important documents including the following:
Business Plan
Every small business must have a business plan to show the lender. The business plan will explain what type of business you are running and what type of products you sell. It will give the lender a good idea as to how your business will become successful and what you are going to do in order to ensure that the business will become a success. If you don't take the time to go over your business plan and make sure it includes a marketing strategy and all the information the SBA is looking for you will find it extremely difficult to acquire the financing you need to start your small business. Here are a few things that you also need to include in your business plan:
Financial Records
In addition to your small business plan you also need to provide solid financial records to qualify for the SBA loan. The financial records should go back about 2 years for the SBA to make a decision on the amount of financing you qualify for. You must also provide information pertaining to your cash flow, bank statements, and projected cash flow. Each owner must include financial statements as well.
Collateral
To qualify for an SBA loan you must also have some type of collateral to secure the loan. Are you planning to use machinery or other equipment to secure the loan? Some business owners even go as far as fronting a piece of property they own to secure the loan while others will offer cash flow records to secure the loan. Work with the SBA to find out what collateral you have the will secure the loan.
Loan Request
The SBA requires you to fill out a loan request when you are applying for a SBA loan. The loan request basically states what type of loan you need and the amount of money you need for your small business.
The SBA will help you gather all the necessary paperwork you need to gather for an SBA loan. They provide a link on their website where you can download the "checklist of required paperwork" in order to submit the application and go through the loan approval process.
Corporate Credit Concepts specializes in a SBA loan. For more information about a SBA loan and how it might benefit your business, please CLICK HERE for a free phone consultation.