Tips for Getting an SBA Loan
The Small Business Administration is a government-backed program that helps small businesses get the funding they need to begin or remain in operation. However, because it is a government program, the terms, conditions, and rules you need to follow can sometimes feel overwhelming. Luckily, these tips for getting an SBA loan can help you along the way so that your business can continue to thrive.
Work With a Financer That Understands SBA Loans
Not all banks or financial institutions are updated about how SBA loan work. If you want to get the most out of your funding, it is important to find a financer that truly understands the process and can help you along the way. Beyond that, you will likely have even better luck if you also secure a financer that understands your industry and market.
Know How Your Persona Finances Will Work for You
An SBA loan is not just about your company’s finances, unfortunately; the government also takes into account your personal finances. Look for good personal credit and liquidity. If you have a lower credit score than you’d like, see what you can do to fix it. Pay off any old debt or work to dispute any errors with the three major personal credit bureaus.
Come Armed With a Business Plan
Most financers that work with SBA loans want to see some type of business plan. Create a strong plan that shows a financial institution that you take your company seriously, have worked through the finances, created a strong budget, and have a solid marketing plan in place. Showing you are responsible works in your favor.
Only Apply if Your Business Is Solid
The government simply doesn’t want to provide financing to a business that isn’t on solid ground. Even if you’re seeing success, you want to be sure that success isn’t a fluke first. Never apply for a loan to help you build a second location, for example, unless the first one has been on solid ground for at least a few months.
Learn the Language
Finally, applying for SBA loans through financial institutions means lots of financial speak. To ensure you’re getting the best deal to meet your needs, it is important to learn and understand the terms surrounding this type of financing. Doing so ensures you know exactly what type of contract you’re signing.
Research each type of SBA loan, as well as the potential financial institutions, thoroughly before applying for a loan or signing a contract. This ensures you are making the best decision for your business.