Many people have envisioned starting their own business. However, the process can be difficult at times. Securing the necessary financing to start your business may be held back by different factors, such as bad credit or no collateral. The Small Business Administration seeks to help aspiring entrepreneurs earn the necessary financing to start their business through offering them a small business loan. Receiving an SBA loan can be difficult due to the complex SBA loan application. Here are some strategies that you can use to pass your SBA loan application and move forward towards a successful future.
Do Research On The Basics
Different banks and lenders may have different criteria that you have to meet in order to be approved for a small business loan. The primary SBA programs that banks are affiliated with are The Preferred Lenders Program and The Certified Lenders Program. Do your research to decide which lending program is the best fit for you, as that will help the application process run smoother. Banks who use The Preferred Lenders Program can approve loans with the permission of The SBA. Banks who use The Certified Lenders Program will consult with The SBA before making a final decision. Getting approved may take a little longer if you choose The CLP.
Have All Of Your Documentation
To be approved for an SBA loan, make sure that you have all of your business documents in order. The lenders will certainly take a look at your finances to assess the strength of your investment and whether you’ll be able to repay the loan. It may benefit you to explain in your application how you plan to spend and repay the loan. Be aware that The SBA does require a personal guarantee if you will be holding a large part of the company’s equity.
Look At Different Institutions
Take time to do your research on the different lenders. Try to find lenders that have an established reputation of positive results. Check with the lenders to see how many SBA loans have they approved within the last few years. Inquire about the average size of those loans and the percentage of those loans that included real estate property. These questions can give you a good idea of what to expect as you prepare to fill out an application, as well as what you may have to put up for collateral.
Have Some Experience
The SBA will look at your experience as well as the business’ experience while evaluating whether to approve your loan. Even If you do not have a track record of experience, that does not mean that you will not be approved.
Plan For The Interview
Before approving you for the loan, the lender will likely call you for an interview. Make sure that you can explain the information that is listed on your application. Have a clear and descriptive business plan that grabs the attention of the lender.
Heritage Bank Will Assist You
For more information about the SBA loan application, please contact Heritage Bank. Heritage Bank offers small business loans, and our loan officers will be happy to assist you through the process.
Edward L. Taylor Jr currently serves as a Clayton County Business Banker with Heritage Bank. With over 15 years of experience in the banking industry, Ed can provide you with the best business products and services to serve your needs now and well into the future.
Vice President Business Banker • 770-515-7032 • [email protected]