Is it time to apply for an SBA loan? This invaluable small business resource can make a huge difference for you and your business, but you need to know how to get started effectively, whether you’re a good candidate, and most importantly, how to prepare without completely draining your energy.
In this article, the experts at BNC National Bank break down your road to an SBA loan into achievable steps. We’ll also highlight how a local community bank can make your road to an SBA significantly simpler and possibly even more successful.
Here’s what you need to know about how to get an SBA loan.
How to Get an SBA Loan: Preparing for an SBA Loan Application
Applying for an SBA loan is a lengthy process. It will pay off to invest time in preparing as well as you can instead of jumping into the deep end with applications you’re unprepared to tackle.
Take a deep breath, and follow these four steps:
1. Make sure you’re a good candidate for an SBA loan.
To qualify, you will need to demonstrate eligibility in several ways, including:
An appropriate amount of business or personal collateral
Proof that you have been operating a registered business for at least two years
If you don’t meet these qualifications, don’t worry—speak to your local bank to learn more about other business loan options.
2. Select the correct type of SBA loan for you.
Not all SBA loans are created equal! The SBA loan application team at your local community bank can help you determine which type of SBA loan you should apply for. For example, different available SBA loans include:
- Standard SBA 7(a) loans
- SBA 504 loans for large equipment or real estate
- SBA microloans for smaller amounts
3. Find a great SBA lender.
You should look for a lender with the following characteristics to ensure the best experience:
The specific financial expertise you need
Knowledge of your location and industry so they can provide tailored advice
Perhaps most importantly, the flexibility and bandwidth to pick up the phone when you call for help
4. Start gathering your materials.
This can be one of the most time-consuming parts of the process, so begin early! You’ll need to fill out SBA-specific forms, statements regarding your financial situation, and business licenses. You may even need to provide your business plan.
How to Get an SBA Loan: Applying for an SBA Loan Successfully
You’re ready to apply? Great! Now that you know how to get an SBA loan, there are just a few more things you need to handle to ensure your SBA loan application is as successful as possible.
Have a professional at your local bank look over your materials.
Any inaccuracies in your information could delay your loan approval (or worse), so it’s in your best interest to check twice. Taking the time to complete this step can also give you invaluable peace of mind and confidence that you’ve put your best foot forward.
Work with your lender to submit your loan application package.
If you work with a local community bank as your lender, they’ll have time to help you with this step personally—and will also have the capacity and interest to keep you posted with any updates as you wait! SBA loan processing times can differ wildly, so staying in contact with your banker to peek behind the scenes of SBA loan processes is an excellent way to get the most updated information possible.
After you’re approved, your lender will help you with the next steps.
This includes starting the SBA loan underwriting process, determining how you will provide any collateral and personal guarantees, and other steps to ensure you’re on the way to using the funds well and being able to repay the loan successfully.
Although the SBA loan application process can seem complex, it can be well worth it as a way to grow your business. Just make sure you’re working with a great financial partner—someone who truly has your best interest at heart!—to ensure you have the best SBA loan application process possible.
Partner with BNC National Bank for Your SBA Loan!
When you’re looking for an accessible way to grow your small business as effectively as possible, an SBA loan can be an excellent opportunity. As your friendly neighborhood community bank, BNC National Bank is proud to be a top-tier resource for entrepreneurs and small business owners ready to level up their businesses.
Interested in getting started? Grab our handy resource, 4 Stops to Take on the Roadmap of an SBA Loan.
Feel free to call our on-staff SBA loan experts anytime if you require additional support.