As a small business owner, you know that coming up with the money you need to expand your operation isn’t easy. Worse, qualifying for traditional business loans isn’t always possible. Luckily, SBA loans are a great alternative to traditional business loans designed specifically for newer, small businesses that can’t satisfy the requirements big banks set for their loans. The application process isn’t as straightforward as you might think. Here are a few key steps you’ll need to take to get the loan you need.
Talk To Your Bank
SBA loans are backed by the Small Business Administration, but they’re issued by banks and credit unions. This means you need to speak with your bank first before you start the application process. Find out if they offer SBA financing and, if they don’t, turn your search to other banks in your area. You’ll need to choose a lender that works with SBA-backed loans. Not all banks do, so take your time and discuss your needs with each bank in detail.
Gather Your Financial Documents
Once you find a qualified lender, you’ll need to gather your business’s financial documents together. These will help you fill out the application correctly. At a minimum, you’ll need to have a copy of your business plan, your bank statements, your personal bank statements (if required) and tax returns for the last few years. If you’re not sure where any of these documents are, find them before you start applying. This way, you’ll avoid unnecessary delays and will get a decision quickly.
Though it’s tempting to work with the first lender you find, it’s not in your best interest. You need to shop around and compare quotes for SBA-backed loans from several lenders before you make a decision. Remember, though the loans are backed by the SBA, the lenders control how much you’re allowed to borrow and what interest rate they’ll charge you on the loan. Some lenders may view your business in a different light and may assess a higher interest rate than you deserve. The only way you’ll know for sure which lender is working in your best interest is to compare quotes. Try to get quotes from at least three lenders and see what each one offers you. As a general rule, choose the lender that offers you the largest loan with the lowest interest rate.
SBA loans are a great way to finance your company’s growth. Follow these simple steps and you’ll be able to find the right loan for your business.