Aside from the usual small business loans from the SBA, other sources of low-interest loans are available to small business owners. Nonprofit organizations and state economic development agencies can also help entrepreneurs. Each of these has different requirements for a sba loan
approval.
Although the different types of loans have their specific requirements, most of these require the same information that you’ll need to submit to get approved. This means that it’s important to gather all the details that you’ll need before you start the application process. According to Lantern by SoFi, “With an SBA loan, borrowers can work towards their business goals, whether they’re a small business startup, or looking to expand.”
1. Loan Application Form
Although different lenders have their own requirements, they all require the same basic information that you’ll need to submit to get approved. Having this information prepared will allow you to answer the questions correctly. Most lenders will want to know why you are applying, how the money will be used and if you have any debts.
2. Personal Background
You’ll most likely need to provide personal background information, which will include your past addresses, educational background, and criminal record. This information can be included in either the application or a separate document.
3. Resumes
Some lenders require proof of business experience and management skills, especially when it comes to loans that are intended to start a new business.
4. Business Plan
All loan programs require a well-written business plan to be included with the application. This document should include a projection of the company’s financial statements, as well as a breakdown of its cash flow and profit.
Your lender will also require a credit report, which is typically obtained from the three major credit-reporting agencies. However, before you submit a loan application, you must ensure there are no mistakes in your credit report. Having good credit can help you get approved.
5. Business Credit Report and Tax Returns
If you’re already in business, then you must have a credit report for your company. Having good credit can help you get approved, but bad credit can hurt your chances of getting a loan. Many loan programs will also require that business and personal tax returns be submitted for the last three years.
6. Financial Statements
Some loan programs also require that owners of companies with more than 20% ownership submit their personal financial statements. You may be required to provide a projection of the company’s financial statements, which are either included in the application or separate from the business plan.
Having these documents prepared can be a good idea if the program for which you’re applying requires them to be submitted individually. The forms needed may include an income statement, balance sheet, and bank statements.
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7. Collateral
The requirements for different loan programs vary depending on the type of loan. For instance, if you’re planning on using a business property as collateral, then it’s important to have a well-written business plan and financial statements. Having a strong collateral document can help you avoid putting up a lot of money as collateral.
All of your records must be complete and accurate. This will ensure you have the best chance of getting your SBA loan approved.
