SBA Loan Process: Be Prepared to Succeed

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.

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