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The Five Steps to Take to Get an SBA Loan
1. Prepare a detailed Business Plan, including, but not
limited to the following:
- History and or description of business, discussing market,
competition, and any other supporting factors.
- Resume of Management, including education, technical, and all work
experience.
- An existing business seeking a loan must furnish signed and dated
historical financial information (Balance Sheet and Profit and Loss
Statements) for the last three years or since business was established (if
less than three years). Federal Income Tax Returns are acceptable if
historical financial information is not available.
- An existing business must furnish a signed and dated Balance Sheet and
Profit and Loss Statement not more than 90 days old, with an aging of
accounts receivable, payable, and schedule of note balances as of the date
of the Balance Sheet.
- An existing business should prepare a statement of the amount of the
loan requested and the exact purpose for which it will be used.
- A new business owner must furnish a Statement of Financial Need,
reflecting how the business will use its equity injection and how it will
use the loan proceeds. SBA does not provide 100% financing. New business
owners must inject some CASH to help finance the proposed business.
- A current personal financial statement, not more than 90 days old, of
each proprietor, 20%+ limited partner, general partner, 20%+ stockholder
with voting stock, corporate officer, or any other person or entity
providing a guaranty on the loan.
- Prepare a detailed projection of earnings (Profit and Loss Statement)
for the first year the business will operate after the loan. Explain on
what these projections are based: what your market is, what price you will
charge, what volume you will expect, how you will distribute your product,
and who are your competition.
- List collateral to be offered as security for the loan along with an
estimate of the present market value of each item, and the balance of any
existing liens.
2. The applicant is required to take the above material to a lender and
request direct financing.
If the lender is unable or unwilling to provide the financing directly, the
applicant may then ask the lender to seek an SBA guarantee. It is best to use
an SBA certified lender.
3. If the lender determines that the loan request has merit, with an SBA
guarantee, the lender will follow through and submit the loan request to the
lender's loan and or credit committee. If approved, subject to SBA's
guarantee, the lender can NOW give the applicant the SBA Business Loan
Application.
4. The applicant returns the completed SBA Business Loan Application to the
lender. The lender completes its credit analysis, etc., reviews the paperwork
for completeness and submits the SBA Business Loan Application, along with
required supporting exhibits, to SBA.
5. SBA will review the application for completeness; accept for processing,
if determined to be complete (if not complete, it will be returned to the
lender); process; and approve or decline.
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