How to Get Your SBA Small Business Loan

How to Get Your SBA Small Business Loan

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What are the chances that you will receive a small business loan from your bank? If you do apply for a loan from your bank and are approved, then the rest of this article is not for you. For everyone else, getting rejected by your bank can actually be a good thing, especially where the Small Business Administration is concerned. Learn how an SBA loan works as the process just may surprise you!

1. Apply to your bank for a small business loan.

Yes, you need to apply to your bank for small business loan first. If you are turned down this is where an SBA small business loan can help you out. That rejection makes it possible for you to apply for an SBA loan.

2. Contact your local Small Business Development Center.

The Small Business Administration operates local branches known as Small Business Development Centers (SBDC). This is where they work directly with businesses such as yours by providing consulting services, business education and other assistance to help you strengthen your enterprise.

An important service that they offer is that they work with commercial lenders who can help you get an SBA small business loan. They will connect you with local lenders that they work with.

3. Obtain copies of your credit reports.

When applying for small business loan you should obtain copies of your credit reports. If you are a new business your credit likely has not yet been established. Therefore, you may be asked to provide personal information to obtain a loan.

Every consumer has credit reports that detail their credit history. Companies such as Experian, Equifax, and TransUnion have information about you that is outlined in these reports. You should not assume that the information is accurate or up-to-date, therefore visit AnnualCreditReport.com to review your reports.

If you find mistakes or notice other problems then notify the respective credit bureau and have these problems corrected before you apply for a loan. Your credit score is reflected by what is found in your credit reports. The higher your credit score the more likely you will be approved for a loan and at favorable terms.

4. Fill out the paperwork.

Submit your business plan and fill out the required paperwork. Beyond your business plan you may be required to offer projections for where your business will be in six months, 12 months and further out.

If you do not have a small business plan in place, complete one before your SBDC appointment. The center may be able to help you craft a plan as well as guide you as you work on your projections. When done, you will be referred to an SBA lender.

5. Meet with your SBA banker.

With your referral in hand make an appointment to see your SBA lender. Plan to dress the part as you prepare for your appointment — business attire is highly recommended.

The lender will discuss with you your options, including short term loans to help you build capital and other lending options. You should know that there are certain types of businesses that the SBA targets including daycare facilities and businesses placed in rural as well as economically deprived areas. Submit your paperwork and await the bank’s decision.

SBA Loan Considerations

It is the bank that will be providing the loan and the SBA will provide the backing or the guarantee. Even so, you must meet certain lending criteria to qualify for a loan. If you have financial problems at the time of your application, then your loan will most likely not get approved. Therefore, clean up your credit and make other efforts to improve your financial standing, if necessary.

See AlsoSteps to Acquire a Small Business Disaster Loan

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