Tips for Taking the Right Steps Applying for SBA Loans
The U.S. Small Business Administration offers many supporting vehicles to both new and established small-business owners. From education to federal funding opportunities, assets are available for your needs if you own a small business. One of the more essential resources the Administration offers are SBA loans, which ranges of business owners can tap into. As with any lending process, applying for such a loan requires a systematic approach. Here are some ways to streamline the process.
Consider Delaying Your Application
If you are just starting out, you likely need money for various business operations. While it sounds counterintuitive when you are chomping at the bit for cash, consider waiting six months to apply. Lenders want to see a financial track record before committing. In the same vein, keep detailed accounts of your monthly sales statements both as revenue evidence and to demonstrate your organizational competence.
Investigate Various Lenders
Just as home buyers should not just jump on their first mortgage loan opportunity, you need to research different financiers for your SBA loan. Performing due diligence will not only lead you to uncover the most favorable rates, but your research will help you ascertain which lenders offer application processes with which you are most comfortable.
Be Open With Prospective Lenders
Financial institution officers providing SBA Loans will see you as risk-averse if they sense you are hiding financial information. Avoid this pitfall by doing the following: First, share any debt you have incurred; the lender will uncover this information anyway. Second, note both your personal and business credit ratings; having this knowledge can also help you be proactive during application discussions.
Work Together With Your Lender
Ideally, you will feel as if the loan application process is a partnership between you and the lender. Work closely with company individuals; of special note, be responsive to their requests for documents and other information. Also, you should clarify your reasons for seeking the loan. These factors may reduce the amount of time necessary for your loan approval and will affect its final terms and conditions.
You should be aware that the loan application and approval process can take more time than you anticipate. If you need money quickly, investigate alternative funding sources or make operational changes so that your business can survive until you receive financing.
After all, you know that you need financial support to order supplies, pay employees and perform other business tasks. If you carefully plan your steps when applying for SBA loans, you can rest assured you will be able to keep the lights on now and in the future.