Tips for Preparing a Successful SBA Loan Application

The Small Business Administration’s lending programs offer small business owners excellent growth opportunities. Lending options through the SBA carry many significant benefits that traditional lending options do not. The application process is subject to many rigorous regulations, and lenders are extremely discerning about which businesses they work with. To give your business the best possible chance of getting approval and choosing a repayment structure that will help your business with long-term growth, you need to put a lot of preparation into your application.

Choose The Right Loan Structure

There are multiple SBA loans to choose from, so review programs’ terms and funding limits carefully before deciding which loan program is right for you. While your business’s short-term needs are probably at the forefront of your priorities as you’re evaluating loan terms, it is also important to think about how repayment terms and encumbrances on your collateral will affect your business in the long run.

Approach the Best Lenders

You’ll have many potential lenders to pursue for funding. Financial institutions that are not directly affiliated with the SBA can participate in their lending programs, but they have to follow all of the regulations attached to SBA loan formats.

There is a burgeoning marketplace of online lenders. Applying to an online lender won’t necessarily shorten the approval time for an application, but approaching funding providers based online can help you gain access to more opportunities. Ideally, you should work with a lender that has experience lending to companies that operate in your field and is well-versed in the current trends driving revenue in your industry.

Get Your Financial Documentation in Top Shape

Lenders want to see that you’re highly organized about managing your business’ financing. Good financial oversight reflects that you’re using your business’ resources judiciously. Also, it gives them confidence that the information that you relay about your financial position is credible and accurate.

Prepare detailed financial statements detailing all of your assets and revenue. You also have to produce a comprehensive accounting of your spending activity and outstanding liabilities. If your debt-to-asset ratio is too high for lenders’ comfort, it could hurt your chances for sba loans.

It may be necessary to compile supporting documentation that’s relevant to your strengths as an applicant. Lenders may request copies of active contracts with customers and creditors.

Lastly, bear in mind that your business credit score could weigh heavily on lenders’ review of your application. Check your score in advance of applying, and develop a solid strategy to build up your company’s creditworthiness.


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