The Small Business Administration helps people start, build and grow businesses in the United States of America, Puerto Rico, and Guam. The SBA does this by guaranteeing, think co-signer, to commercial lending institutions that the loans they make to SBA qualified businesses are safe loans that will be honored.
Getting a loan through the Small Business Administration is not easy but it is also not impossible. Most businesses who apply for SBA loans do not get them because they do not understand the process. Your small business will stand a better than average chance of getting an SBA loan if you understand the process, the rules you need follow, before you apply. So let’s look at the process.
The SBA approved lender is going to want to see a lot of information from your business. This information will qualify your business for a loan. You will need the following information to apply for a Small Business Administration loan from an approved SBA lender.
1. A business profile
This document describes the type of business you own, its annual sales, the number of people your business employs, how long your company has been in business, and a profile of the business owners.
2. A loan request
This document will detail how the loan funds will be used. It should include the purpose of the loan (to buy machinery, real estate), the amount of the loan, and the type of loan you are looking for.
3. Collateral statement
This document will offer a description of the collateral offered to secure the loan and should include the equity in your business, borrowed funds, and available cash.
4. Business financial statements
You will need to show complete business financial statements for the previous three years and an interim financial statement for the current fiscal year.
5. Personal financial statements
Your business will need to show the personal financial statements for all partners, including shareholders who own more than 20% of your business even if they are not hands-on involved in the day-to-day managing of your business, for the past three years.
Once you have gathered all the above information you will need to fill in the SBA loan application, form 4 or 4I, a SBA personal history form, SBA form 912, and the SBA personal financial statement, form 413. You will also need a detailed P&L (profit and loss) for 90 days and a detailed, one year, income projection.
Take all of your information to a Small Business Administration approved lender; most large banks and credit unions are SBA approved. They will collect your information and make a decision based upon the data provided.

Guide to Small Business Loans
Starting a small business is the dream of many, but in order to do so sufficient capital must be secured to cover the many costs associated with start-up. The most frequently used option for obtaining capital used by many entrepreneurs is a small business loan. Before you apply for a small business loan; however, it is important to make sure that you understand what is required.

Requirements for a Small Business Loan

As is the case with any loan, when you apply for a small business loan, lenders want to be sure that the level of risk they take on is as small as possible. This means that applicants for small business loans will need to demonstrate that they are credit worthy. Your ability to present your business as a responsible, credit worthy entity will greatly improve your chances of being approved for a small business loan.

When applying for a small business loan you should be prepared to provide a number of documents to the lender. These documents include tax returns, personal financial statements, a business plan and monthly cash flow projections. You should also make sure that you have a detailed plan that will demonstrate how you plan to use the proceeds of the loan.

The exact approval guidelines for small business loans tend to vary from one bank to another and can be applied on a case by case basis.

Options for Financing a Small Business Loan

When looking for small business loans, you should also know that you have different options available to you. One of those options is to apply for a loan with a local bank or a bank with whom you already have an established relationship. This can be a good option if you have a good credit rating and can provide a well thought out business plan.

There are also other options which you may wish to consider as well. Private financing is one of those options. Private small business loans are typically more expensive than loans that are obtained through banks because the interest rates are higher, but they are advantageous in some situations. The most common situation in which private small business loans are used is when the entrepreneur’s personal credit rating does not allow them to qualify for a loan through traditional methods.

In addition to these loans, there are other options for financing a small business as well. One option would be to obtain a line of credit. This option is typically used for paying for the day to day operating expenses, with the maximum amount of the credit line determined by the business’ accounts receivable.

Leasing is another financing option that can be used in many situations. This is a good option for procuring equipment and other forms of fixed assets. Rather than buying the assets outright in the beginning, the items are instead leased and then purchased at the end of the lease period.

Business credit cards are also commonly used to pay for business expenses as well. These are a good option for paying for regular or recurring expenses. Business credit cards are usually only provided with the personal guarantee of the business owner.

Other options are SBA small business loans. There is a variety of SBA loans which are either partially or fully guaranteed by the Small Business Administration. Business owners apply for the loans through a lender, but must be approved by the SBA prior to the loan being approved.

Time frame for Securing a Small Business Loan

The amount of time that it takes to secure a small business loan depends upon the method used by the business owner. Applying for a non-SBA loan through a lender can be a somewhat faster process, but it can still take a few weeks, depending on how long it takes the lender to review the necessary documentation. Loans that are guaranteed by the SBA will take longer because the loans must be approved by the SBA in addition to the lender.