Here are some suggestions you can employ to succeed in your quest to find and eventually qualify for an SBA loan:
1. Be prepared. Keep in mind that preparation is the key to ensure the immediate and quick processing of your application, not just for an SBA loan, but also for other business lines of credit. Hence, we advise you to prepare the necessary documents, which your target lenders might require you to submit with your completely-filled-out application forms. To find out what they are, let’s take a closer look at three of the most important files you need to attach to your SBA loan application.
a. Your personal and business credit reports. Did you know that your chances of qualifying for an SBA loan are tied-up with your personal credit score as well as with the credit rating of your business? This is why we encourage our readers, such as yourself, to order the latest copies of these documents at least six months before filing their applications for business financing. That way, you can determine what your current scores are and you can gauge how likely your requests for funds will receive approval.
Moreover, such step will give you the opportunity to check the accuracy of the entries found in your annual and business credit reports. After all, a single error in your credit files can inflict severe damage to your personal and business credit history and thus compromise your chances of receiving financial assistance.
b. Previous business income tax files. Look for these financial records and have them photocopied or scanned before submitting your request for business financing.
That’s because your income tax files can help the personnel of the SBA gauge the sales and market performance of your commercial establishment. Moreover, such documents can help them assess if your enterprise can really afford to pay back the funds you wish to borrow and use for business financing.c. Your financial documents, especially your income tax returns for the past three years as well as the certificates of ownership of all your current assets. If you’re still employed then, it would also be beneficial to obtain copies of your employment certificates as well as your pay-slips for the past six months. You should also prepare copies of your identification documents, including your passport, driver’s license or citizenship papers. That way, it will be much easier for your target lenders to verify your identity.
2. Make an impressive, yet factual, business plan. Most lenders today, as well as the local partners of the Small Business Administration, are eager to attend business presentations arranged by their prospective borrowers. After all, these presentations give them the chance to evaluate the profit-potential of the business ideas being pitched to them, and in time, decide whether or not to extend business lines of credit to their loan applicants.
One way to convince lenders to grant your enterprise with sufficient funds is to come up with a sound and well-researched business plan. This document should contain information with regards to your business, particularly on your mission-vision statement, the name and exact location of your enterprise, your product- or service lines, the type of business structure you have decided to use, the profiles of your business partners and shareholders, if you have any, and how much funds you have initially invested in your commercial establishment. Then, in one of its chapters, explain why you need funds for business financing, how much cash you need, and how your enterprise will pay back the funds you intend to borrow. You may also decide to include in your plan the personal or business assets you’re willing to pledge against your loan, to guarantee repayment of your future dues.
By doing so, you can establish yourself as a credible borrower and you will most likely convince your target lender, in this case the partners of the SBA, to grant your request for a business loan.
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