Working with the SBA to get a small business loan can get you some of the best terms available, but there are strict qualifications and many businesses that are also trying to get those same loans. In order to be successful, you need to make sure that your application stands out. Here’s how you can get organized and increase your chances of getting an SBA loan.
Evaluate Your Finances
Many lenders make it simple to find loan requirements online, so you can easily evaluate your finances like a lender would. Gather your financial documents and examine things like your credit score, the time your company has been in business, your assets, your debt, and your cash flow history. If you haven’t been paying a professional to organize your finances and tax documents, you need to start now. Some lenders prefer financial documents that have been viewed by a CPA, so it’s important to anticipate the extra cost.
Evaluate Your Lender Options
Gone are the days when the local bank was your only option for a loan. Now, you can head to online lenders, big commercial banks, and peer-to-peer lending sites in addition to local banks. They will all have different requirements and processing times, as well as term limits, loan limits, and customer service policies. Having a good relationship with a lender can be useful in the future, so this choice is important.
Evaluate Your Assets
In addition to your company’s financial history, lenders will want to know how you’ll guarantee any loan they give you. This typically means you’ll need to offer up some kind of collateral, and the value of the assets you offer can impact the amount of your loan. If the business doesn’t have the appropriate assets, the owner may be asked to provide the collateral personally.
Evaluate Your Online Presence
When lenders research your business, what’s the first thing they see online? If they see an outdated website that was clearly made by an amateur, or two mediocre reviews from two years ago, they may not feel confident in your ability to utilize a loan properly. In addition to a professional website, you should look through your social media presence, including any personal pages.
The SBA loan application process can be stressful, but the outcome can be wonderful for your company. If you’re in the researching phase, these tips can help your application stand out.