6 tips you should consider to get an SBA loan
Understanding SBA offerings, and how they differ from traditional lenders' offerings, could make a huge difference as your business evolves and adapts to changes in the broader economy. Here are some essential tips to start considering the option of applying for one of the SBA loans:
1. Be clear about how much money you need.
There are different requirements for buying real estate, acquiring working capital, expanding your business, buying a business, or starting a business. The total project cost and how much money you have available to put into the project are significant factors.
2. How will you pay the loan?
If you are starting a new business, you’ll need to consider the projected income and expenses that the business will have. If you own a mature business, you’ll need to understand if you have enough income (after expenses) to cover the amount of your monthly payment plus a surplus.
3. What type of industry is your business in?
Requirements vary for restaurants, retail businesses, franchises, manufacturers, professional services, and more.
4. Have a comprehensive business plan
Many of the answers to the above questions should be included in the business plan. This is a crucial step to starting any business and needs to remain the bible you live by as your company matures.
5. What does your personal financial situation look like?
Your assets and liquidity on your personal balance sheet serve as important factors in whether you earn an SBA loan. You need to know your numbers, like your personal debt position and credit score, even though the loan is for your business.
6. What kind of collateral do you have to offer?
If your business has tangible assets, or you own real estate, it may make your loan application more attractive.
The answers to these questions can help you determine if an SBA loan is something you should pursue as a business owner. But don’t try to answer them yourself. Work with a banker who knows the SBA program inside and out. At WealthSpring, we have helped many clients obtain SBA loans since we have professionals who are experts in this process.