What Lenders Need for SBA Loan Approval

The Small Business Administration is a government agency that offers loan guarantees for businesses, along with providing a huge amount of information to help small businesses. What is often called an SBA loan is actually a loan from a traditional lender that is backed by the SBA. This basically means the SBA will pay if you default on the loan. It offers an extra sort of security to the lender, encouraging them to loan small businesses money. To apply for this type of loan, you will need to gather some information and documents. Business Plan 

You will have to have a clear and concise business plan. It should be carefully constructed so that it answers any possible question a lender could have about your business. It needs to cover every aspect, like marketing, finances, competition and management. It should be thought out and detailed. The better your business plan, the better chances you have of being approved for a loan.

Personal and Background Information

You will also need to provide some personal and background information. You will want to have all your information, such as your name and previous names, your address, your contact information and any details about your personal life that could affect the loan, such as criminal history. You also should have a resume for yourself and any partner who will be participating in the business.

Financial Information

An important part of the information you need for an SBA loan will be financial information. The lender will be very interested in this, so make sure it is complete. You should have your personal credit report and one for your business. You need to have tax returns and any financial statements. You may also want to provide vendor agreements and any pertinent information about your or your business’ finances. Also, make sure you have all bank statements for all accounts you have or you have for your business.

Additional Information

In addition to the above information, you will also need to be ready to provide collateral. If you are putting up assets, it helps to have the paperwork on them and an appraisal. You should also have all legal documents for your business. This may include your business license, articles of incorporation and any contracts you have.

Applying for an SBA loan is very similar to applying for a conventional loan. You will have to provide a lot of information. The lender will do many checks into your information to verify what you have provided before the loan can be approved.