SBA loans can be valuable sources of capital for businesses, yet you may find yourself flipping the months on the calendar once, twice or even three times before your application is fully processed. However, you don’t have to be stuck waiting too long. There are ways to prepare your application that can make getting an SBA loan much quicker and easier.
Update Financial Information
First, go to your records and start organizing to at least three years of your business history. This includes your financial statements, including balance sheets, income and cash-flow statements, as well as your tax returns. SBA loan lenders are also going to want your business plans. Prepare sales projections that will tell your lender what you expect to make in the future. Having a marketing plan is also advisable. In short, your lender wants to know your business is healthy and is an income generator.
Find the Right Financer
If you’re having trouble getting loan approval, look at who you’re applying with. Some lenders may cater only to specific businesses, while others may exclude some enterprises as riskier bets, like start ups. To hedge your bets, apply at several banks at once. Some banks will start a loan process only to cancel it a few weeks in. By having a few applications in progress simultaneously, you’ll cut the risk of losing time on a rejection.
Put Down More Money
SBA loans are attractive because they don’t require you to put down as much money. Some SBA lenders may only need as little as 10 percent from a borrower. However, it may be in your best interest to offer to pay down more than an ordinary SBA loan requires. This will alleviate some of the bank’s risk and offer them more incentive to approve you. This can be more beneficial if you work in an industry that is considered riskier by banks.
Ultimately, there’s no substitute for experience. If you’re new to the process and are finding it dragging on, look for advisors that can help you. Seek the help of a business advisor who understands SBA loans and the industry you work in. Some SBA programs include counseling services. There are also non-profit business counselors that can help you. Check the internet and look for qualified advisors in your area. Some of these nonprofits are listed on the U.S. government’s Small Business Administration website.
Since SBA loans offer a recourse when businesses cannot find funding elsewhere, it’s important to take all the appropriate steps while applying for one. Careful preparation of your financial records and some good outside advice can cut through the hassle of getting SBA loan approval.