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5 Steps to Apply for a Small Business Loan

Applying for a small business loan can be daunting, but we’ve put together a checklist with 5 clear steps to help you prepare.

At SmartBiz®, we’ve expedited and streamlined the application process to help you increase your approval likelihood for an SBA 7(a) loan. See if you prequalify in minutes and receive your funds in as soon as 7 days after completing your application.

 

Here are our tips to prepare from start to finish.

1. Determine Eligibility

Before beginning your application, make sure that you meet basic eligibility requirements. You don’t want to invest your valuable time if you don’t qualify.

Eligibility requirements, in addition to SBA requirements, can vary from lender to lender.

At SmartBiz Loans, the eligibility requirements for an SBA 7(a) loan of up to $350,000 are:

  • Time in Business: 2+ Years
  • Business owners must be U.S. citizens or legal permanent residents
  • Credit Score: Business owners must have personal credit scores above 650
  • Cash Flow: Sufficient business and personal cash flow to service all debt payments demonstrated by tax returns and interim financial data
  • Public Records: No bankruptcies or foreclosures in the past 3 years; no outstanding collections; no open tax liens
  • SBA Specific Requirements: no delinquencies and/or default on government loans

The eligibility requirements for a SmartBiz SBA commercial real estate loan above $500,000 are:

  • The real estate must be majority owner-occupied. This means at least 51% of the square footage of the property you’re buying or refinancing must be occupied by and used by your business.
  • Time in Business: 2+ Years
  • Business owners must be U.S. citizens or legal permanent residents
  • Credit Score: Business owners must have personal credit scores above 660
  • Cash Flow: Sufficient business and personal cash flow to service all debt payments demonstrated by tax returns and interim financial data
  • Public Records: No bankruptcies or foreclosures in the past 3 years; no outstanding collections; no open tax liens
  • SBA Specific Requirements: no delinquencies and/or default on government loans
  • The rent replacement option requires a loan payment that does not exceed the current monthly lease expense

Want to know if you’re SBA loan ready before you apply? Make sure you meet the requirements above then check out SmartBiz Advisor™. This online educational tool helps small business owners learn about how banks evaluate them and offers steps that small business owners can take to help them become SBA Loan Ready if needed. Learn where you stand when it comes to obtaining low-cost funding with SmartBiz Advisor, and find out what it takes to strengthen your unique application so you can qualify for the best terms.

2. Prepare a Business Plan

If you’re ready for an SBA loan and meet the basic qualifications, the next step is to solidify a business plan to demonstrate that your small business is financially healthy and eligible for low-cost, secure funding. FYI: SmartBiz Loans does not require a business plan to qualify.

Submitting a business plan is a unique opportunity for you to present a roadmap with concrete details on how you plan to achieve your goals. A business plan will help you set milestones to measure success and position yourself within your industry. You’ll give lenders an accurate picture of where you’re headed in the future.

3. Gather the paperwork

Your next step is to start preparing. No matter which lender you’re working with, having all the necessary documentation is crucial to obtaining your funds as quickly and efficiently as possible. At SmartBiz, you set the pace when it comes to completing the SBA loan application. The more readily available your documentation is, the faster we can help you get to a “Yes” from one of our lending partners.

Don’t take our word for it! Check out this review on our TrustPilot profile from a borrower who funded in only 10 days: “I’m sure Zach was working with other clients, but he was so attentive and responsive, it seemed like I was the only loan he was working on. He is a credit to SmartBiz. In a matter of 7 working days from my initial contact, Zach finished his work and submitted the loan to the bank. The SBA loan was approved and funded 3 days later. A TOTAL OF 10 WORKING DAYS FROM START TO FINISH.”

As you’re progressing through the application, you’ll need to demonstrate that you’re able to make regular payments. Some of the most common documents that our partners request include:

  • Personal & Business Tax Returns
  • Personal Financial Statements, required from each individual owning 20% or more of the company
  • Profit and Loss Statement
  • Balance Sheet
  • Collateral

4. Connect with an SBA Loan Lender

Once you’re prepared to answer questions, you’re almost ready to apply for funding. Before you do, you’ll need to find a provider who can package and service the loan. That’s where SmartBiz comes in. We’ll help you increase your chances of getting a “Yes” from one of our lending partners by matching you with the bank partner most likely to fund your particular business profile.

See if you prequalify in 5 minutes today by answering a few questions about your business and you’ll be on your way to applying for quick, easy, and transparent funding.

5. Fill out the necessary forms and application

At SmartBiz, individual applications can vary based on the loan amount and the use of proceeds. Typically, some of the documentation you’ll be expected to provide is an executive summary, ownership information, and a detailed plan for how the funds will be applied to the business. With our simple online format, you’ll see your application presented clearly with actionable next steps and Loan Specialists are available to answer any questions that arise.

Once you complete the application and it’s been approved, the lender will deposit your funds. At SmartBiz, you can receive the capital you deserve within as fast as 7 days after paperwork completion.

 

* The information provided through SmartBiz Advisor, including the Loan Ready Score, is for educational purposes and is not the same as scores used by lenders for credit decisions. SmartBiz Advisor is not a financial or legal advisor as defined under federal or state law. Use of this information is not a replacement for personal, professional advice or assistance regarding your finances or credit history.

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