Step by Step Guide to Securing an SBA Loan

A STEP-BY-STEP
GUIDE TO SECURING
A SMALL BUSINESS
LOAN

There are over 8 million small
businesses in the U.S. These
establishments come in many sizes
and their financial needs vary
accordingly.

If you’re planning to start a business or
expand an existing business, and you have
trouble qualifying for a traditional bank loan,
you might need SBA loan financing.
SBA small business loans range from about
$5,000 to $5 million with the average loan
around $371,000.

There are several types of SBA loans with
different allowable uses.
These loans can be used for working capital,
renovations, equipment, to finance
receivables, and in some cases, to finance the
purchase of company facilities.

The following step-by-step guide will outline everything you
need to know about SBA loans and how to secure one for
your business.

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This type of loan is the most basic and the
most common within SBA's business loan
programs. It gives loans to eligible borrowers
for starting, acquiring and expanding a small
business when they can't get funding through
normal channels.
7 (A) LOAN
PROGRAM

CDC/504 LOAN
PROGRAM
This type of loan provides growing businesses
with long-term, fixed-rate financing for major
fixed assets.
A private lender must agree to cover up to 50%
of the loan; a Certified Development Company
picks up 40% and the borrower must contribute
at least 10% equity.

This loan type offers very small loans to start-
up, newly established or growing small
businesses for working capital or the purchase
of inventory, supplies and equipment.
These loans are administered through
nonprofit organizations with experience in
financing small loans.
MICROLOAN
PROGRAM

Under law, the SBA can't guarantee
loans to businesses that can obtain the
money they need on their own. So you
have to apply for a loan on your own
and be turned down first.
CAN’T
SECURE
TRADITIONAL
BANK LOAN

In order to qualify as a small business, your
establishment needs to meet the government's
definition of a small business for your industry. Size
requirements vary depending on industry, but
generally they cannot exceed
500 employees.
MEET THE SBA'S SIZE
REQUIREMENTS

The SBA does not secure the loan directly, rather they make
loans available through participating vendors and provides a
government guarantee to the lenders. Therefore, you must
submit a loan application to a bank or other financial company
and ensure you meet their specific qualifications.
MEET LENDER
QUALIFICATIONS

REVIEW YOUR CREDIT REPORT
A major consideration for a loan is your personal and business credit history. A high score is
important to be able to secure a SBA loan. While some SBA loans may be made with FICO
scores below 700, potential borrowers with scores in the high 700s or 800s are generally greeted
with respect by lenders.

HAVE A
BUSINESS
PLAN
A strong, detailed plan that
outlines what your business
is, what you need money for
and how/why you will be
successful is absolutely
essential.

You will need personal and business
financial statements for existing and
startup businesses and as well as a
projected financial statements. The
most important information you can
provide a lender is a cash-flow
projection.
PREPARE
FINANCIALS

You need to find a bank or lender
that works with the SBA. Call
possible lenders, providing a brief
profile of you and your business to
see if the lender has an interest in
exploring the possibility of a loan. If
so, make an appointment to meet
the lender.
FIND
LENDERS

BusinessPlanTemplate.com helps entrepreneurs,
business owners and executives to create plans to
grow their organizations.
Learn more about our
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Step by Step Guide to Securing an SBA Loan

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