Getting an SBA loan can be somewhat lengthy, especially if you don’t know what information is needed on the application. This is why we’ve broken it down step-by-step so you can be better prepared for what’s involved in the process.
Step 1: Make Sure You’re Eligible
Due to the pretty strict standards, it can be challenging for small businesses to qualify for such a loan. So, what determines eligibility?
- Have a personal FICO score of at least 620. 680 or above is a better bet.
- You have to be in business for at least two years. Some startups may qualify for an SBA 7(a) loan, but they will likely find it much more challenging to obtain due to their short length in business.
- Most lenders want to see revenue of at least 100k per year.
- You will have an easier time getting approved if you can offer collateral.
- You can show proof of funds on hand.
- Profitability. Those with booming businesses have better chances of getting approved for a loan.
Step 2: Find an SBA Lender
The SBA is not a direct lender, but they back the loan you get through a lending institution. Consider the following when choosing a lender:
- Do they offer the loan program you want?
- Do they have experience with SBA loans? Those with plenty of experience in this area are labeled “preferred” lenders and can process applications faster.
- What is their average loan size? What are their rates? These are questions you should take into consideration before making a decision.
- How long is the overall process expected to take?
- Do they require collateral?
- Is there an advisor to guide you through the entire process?
Read our blog on another SBA loan commonly used for disaster relief. While we do not offer this loan exclusively, we always want our readers to know of the various resources available to help better their business.
Step 3: Get Your Application Together
It will take some time to gather your information and apply for a loan. Here’s some basic information needed for your application.
- Driver’s license
- Bank Statements
- Balance Sheets
- Personal and Business Tax Returns
- Business Plan
- Profit and Loss Statements
- A Voided Business Check
If you need an SBA loan, we can help! First Union Lending offers numerous financing programs designed with small businesses in mind. Our business loans are fast and flexible, with financing options ranging from $5,000 to $2 million. Contact us today to learn what loans will work best for your business.