Okay, so maybe the sea of red tape that surrounds the SBA Loan is not ever going to be manageable with ease exactly, but it doesn’t have to be hard either. The key is knowing what to expect and being prepared.
We’re here to help you know what to expect and tell you how to prepare, but actually getting the job done is on you.
All Banks are Not Created Equal
You have to find a bank that knows the process for SBA loans, and there is a process for sure. In fact, many individual types of SBA loans have their own processes that must be followed beyond the typical requirements.
A lender that understands the process, knows what is needed, and understands how to put it all together can make the whole thing go much smoother, and though not necessarily fast, definitely faster than a lender who does not get it.
Know What They Want
The bank is going to ask you for a lot of information. SBA loans inherently come with a ton of stipulations because the federal government is basically guaranteeing the funds. This is good for you, because it makes your qualification for the loan less difficult in terms of collateral. It is not so great, because it takes a lot of time and effort to apply for these loans. It is worth it however, and knowing what you need ahead of time can help.
Current numbers, if you are an existing business, is a given. The bank will need more than that. They will also need projections into the future, which is really just a prediction of what your numbers will look like going forward for a certain period of time. This can be difficult to do, and it is usually better to hire an accounting to do it correctly.
Write the Story
The bank will also want to know the story behind the numbers. How did you get them, what assumptions did you make to get to the projections, what is your business about, and why do you think it will work? This is called a business plan, and while you may know your story well enough to repeat it in your sleep, you will be required to present it in a professional, written format.
It should be written regardless of the type of loan you are getting, but the Small Business Administration is pretty picky about having a written business plan. They even have an easy to follow template on their website.