Small businesses are a vital part of the American economy. Small business employs half the workforce and create 60% of net new American jobs.
The Small Business Administration (SBA) has several loan programs to assist the small business owner. There are a variety of different loans to choose from, but the 7(a) General Small Business Loan is the most common. Here are three steps to assist you in getting an SBA loan:
1. Prepare – before you apply for a loan, there are several things you may want to get in order. During the small-business loan application process, you may be asked for some or all of the following:
• Personal background information including previous addresses, other names used, criminal record and educational background, among other things
• Business plan
• Your personal credit report
• Your D&B business credit report
• Income tax returns (most loans will require three years of both business and personal returns)
• Financial statements
• Bank statements (most lenders will require personal and business statements for the past year)
• Collateral document describing the cost/value of personal or business property that will be used to secure the loan
• Legal documents such as business licenses and registrations, articles of incorporation, copies of contracts you have with any third parties, franchise agreements and commercial leases
You also should be prepared to answer questions from your lender such as:
• Why you're applying for a loan
• How the proceeds will be used
• What needs to be purchased and who your suppliers are
• What debts you have and who your creditors are
• Who is on your management team
2. Find a lender – because the SBA doesn't lend directly to businesses, you will need to find a lender. Once you've found the right one contact one of the lender relations specialists at the SBA to get started
3. Apply – once you're prepared and have found a lender, you are ready to actually apply for the loan!
If you are looking for funding for your small business, please give us a call at 281-488-2022. One of our experienced Business Consultants will be happy to assist you in preparing the package and finding the right lender.