• Get Organized for an SBA Loan

    Community Business Finance has helped over 200 small businesses acquire the financing they need through SBA loans. SBA loan programs can provide funds for working capital, buying commercial property, financing a start-up venture, and purchasing new machinery or equipment, including commercial vessels and mobile cranes.

    You may have heard applying for an SBA loan takes too long or requires too much paperwork. Truthfully, an SBA loan requires almost the same forms and documentation as a commercial loan, and the loan experts at Community Business Finance make the process easy to understand and will help you organize the right information.

    As with any loan, you should be prepared to describe your business, how you will use the loan proceeds, and establish an ability to repay the loan. It is important to give detailed and accurate information. Use the following guideline to increase your chances of a successful application process:

    1. Business plan

    This document should describe your type of business, length of time in business, annual sales, and number of employees. This is where you explain why you need a loan and what you will do with the money. You should demonstrate your expertise in your field of business, and your ability to succeed. Get more tips on creating a business plan in our 504 School.

    2. Business financial statements

    This should include complete financial statements for the past three years, including balance sheets and profit and loss statements. You should also include current interim financial statements, as well as signed business federal income tax returns for the previous three years. Read more about the importance of paying your income tax.

    3. Cash flow projections

    This is a detailed projection of income and finances for one year. You should explain how your business would achieve this projection. This will establish an ability to repay the loan and allows the lender to assess risk.

    4. Credit rating report

    You should be aware of your credit rating to be sure there are no surprises, and you can correct any mistakes or problems before the loan application. A proven loan repayment history works in your favor.

    5. Personal financial statements

    For all SBA loans, personal guaranties are required from everyone owning 20% or more of the business. Therefore, financial statements for these individuals must be included. They should list all personal assets, liabilities and monthly payments. They should also include personal federal income tax returns for the previous three years.

    6. Collateral

    List all tangible assets that you are willing to put up to secure the loan. Collateral can be usable assets in the business as well as personal assets. Adequate collateral is required on all SBA loans if they are available. Find more information about collateral in our 5 Cs of Credit series.

    7. Legal documents

    • Business licenses and registrations required for you to conduct business
    • Articles of Incorporation
    • Copies of contracts you have with any third parties
    • Franchise agreements
    • Commercial leases

    8. If you are buying an existing business

    You will need to provide the following for the business being purchased:

    • Current balance sheet and profit and loss statement
    • Previous two years federal income tax returns
    • Terms of the sale, including asking price and list of inventory, machinery or equipment, and furniture.

    The loan experts at Community Business Finance will keep the application process from becoming a time-consuming headache. Our loan underwriter will assemble the company, financial and personal information required for your application and the SBA loan package.

    Community Business Finance's knowledge of SBA Loan Programs and our relationships with a variety of lenders keep everything on track and avoid missteps that may hinder the loan process. Our attention to detail is why we have a proven history of faster approvals and faster loan turnarounds.

    Fill out a short online form to Get Started and a loan expert will contact you to discuss your needs.

    You can also contact our offices:

    In Texas call Bill Ebersole at 713-457-1650, ext. 201, or email him at bill@communitybusinessfinance.com.

    In Louisiana, call Jeanne Bergeron at 1-800-462-1017 or email her at jeanne@communitybusinessfinance.com

     

    Share this post