5 Steps for Getting SBA Loans
Obtaining a Small Business Administration (SBA) loan may be the next step to help your company grow. While this may seem like a daunting task, there are some simple things you can do to ensure a smoother process and a higher rate of approval. Here are five simple steps you can take to get an SBA loan.
Make a Plan
Potential lenders ask applicants several questions when seeking SBA loans. The most common question is why you need the loan. It’s important that you have a specific plan for how you’re going to use the money. Are you using the money to start your business? Perhaps you need money to meet daily expenses. You may also be requesting money to expand your business. Be prepared to show the lender a detailed plan of how much money you need and how you plan to spend it.
Understand Different Types of Loans
Within the category of small business loans, there are different options. Loans are available in the form of a line of credit, invoice factoring, term loans and more. Ask several lenders about the types of small business loans they offer in order to find one that meets your needs.
Choose a Lender
In addition to various types of SBA loans, there are several lenders available. Banks, credit unions, and microlenders are just a few institutions that offer small business loans. Resources are available to you to find a lender that meets your needs. An SBA loan is preferable to other types of funding because they offer competitive rates, counseling and education, and unique benefits.
Check Your Qualifications
One of the first things you should check when applying for a loan is your credit score. Do your best to make sure your personal and business credit scores are in good standing. Other qualifications for receiving a small business loan is the length of time doing business, minimum annual revenue and cash flow. When researching loans and lenders, be sure to check the specific requirements.
Once you’re ready to apply for SBA loans, gather the necessary documents. Most lenders require copies of tax returns, bank statements, financial statements, and legal documents. Have both personal and business documents ready for each of these areas.
Prepare yourself for a smoother loan process by following these five steps. Make a plan, understand various loan types, research lenders, check your qualifications and gather necessary documents to increase your chance of getting approved for an SBA loan.