What is needed to apply for an SBA loan

October 30, 2019

Yes, there are different types of Small Business Administration loans, but all require a core set of documents. Here’s how you can apply to get a loan via the SBA.

 

If you’re planning to expand your business or upgrade your equipment, you’re likely considering the Small Business Administration (SBA) loan program.

To be considered for an SBA loan, you need to apply for a conventional loan under SBA guidelines with one of the organization’s banking partners. The SBA provides a loan guarantee to its partner lenders, allowing them to offer greater flexibility in terms and rates.

While there are different SBA loan programs, here’s what they have in common: All applications share a common set of paperwork that must be filed.

This core set includes the following: 

 

Business structure and leadership

You’ll need to describe the purpose and structure of your business and provide a copy of your business plan, complete with projected financial statements. You’ll also need to describe your business and management experience. The lender will also gather personal information, such as previous addresses, educational background and criminal records for you and your leadership team.

 

Legal

You should be prepared to provide your articles of incorporation, franchise agreements, licenses or registrations required to do business in your state and industry, and any applicable lease documents.

 

Creditworthiness

Both your personal and business credit reports, income tax returns and bank statements will be reviewed. You’ll also need to provide business financial statements, including a profit and loss statement, cash flow and balance sheet and a complete accounting of all business debt and creditors. Most lenders have a collateral requirement and will determine which of your assets can be used as collateral through your financial statements.

Another factor lenders carefully examine is your debt-to-worth ratio. High personal investment with minimal company debt makes you a more attractive credit risk because you have more financial skin in the game.

Other financial measures of interest to the lender are the working capital you have on hand to manage the business, management of accounts receivable and payable, and how quickly you deliver your product or service after the order is placed.

 

Purpose of the SBA loan

Provide a detailed description of what you want to accomplish with your SBA loan and a thorough discussion of exactly how the money will be used to grow your business and, ultimately, improve productivity and profitability. You need to make a strong case that you are a good risk who will repay the SBA-serviced loan in full.

Before you gather these loan documents, talk to your lender about your goals for your business. That way, you can get suggestions about the product that best suits your needs and focus your efforts on applying for the right loan. Armed in advance with the right information, you’ll be well prepared to assemble a successful loan package.

 

SBA Loan Resources

 

Set up your business plan for success with an SBA Loan.

Learn about U.S. Bank

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Start of disclosure content

Loan approval is subject to credit approval and program guidelines. Not all loan programs are available in all states for all loan amounts. Interest rate and program terms are subject to change without notice. Mortgage, home equity and credit products are offered by U.S. Bank National Association. Deposit products are offered by U.S. Bank National Association. Member FDIC.

U.S. Bank is not responsible for and does not guarantee the products, services or performance of U.S. Bancorp Investments, Inc.