Before Getting an SBA Loan: Things Your Lenders Requires
When you’re opening a small business or just need money for an expansion or to gather supplies, there are a lot of financing options out there on the market for you. One of these options is the SBA loan, which is a loan that is guaranteed by the Small Business Administration. These loans are easier to get than other loans and often the SBA can get you good deals with the lenders, such as lower interest rates. Here are some things you will need in order to quality for this kind of loan.
The first thing you want to do when preparing to apply for a loan is make sure that your personal and business credit scores are both good or excellent. This may be more difficult if you have not been in business long enough to acquire a business credit score, but in this case having a stellar personal score will help a lot because it shows that you are responsible with your finances. You can improve your credit scores by paying your bills on time and even early and paying more than the minimum balance. You can also use credit score tracking websites to help you keep track of your scores and give you advice on how to improve them.
Another thing you want to do before applying for an SBA loan is be sure that you know the requirements for the lender you are planning to use. This is slightly different for each lender, but usually you have to have a minimum credit score, annual revenue and years in business. If you do not meet the qualifications, there is no point in even applying.
You will want to gather the appropriate documents to present to the lender when you apply. These documents include income tax returns for both personal and business, bank statements both personal and business, a photo of your driver’s license, leases, licenses, articles of incorporation, a resume and financial projections in the event that you do not have a long operating history. These documents will help show that you are prepared as well as help the lender get a better idea of how you handle finances both in business and your personal life.
There are many things you want to make sure you get right before you apply for an SBA loan. If you are struggling to get some of the paperwork together or need more information on how to apply, your financial advisor will be able to help you.