NBSB’s Advice on How to Prepare for an SBA Loan
Loans from the Small Business Administration, SBA, are great solutions for small business owners to start or grow a business. With an SBA loan you can obtain working capital for things like seasonal financing, export loans, revolving credit, and refinanced business debt. You can finance fixed assets like furniture, real estate, machinery, equipment, and construction or remodels.
Rick Egan, Senior Vice President / Senior Commercial Lender of North Brookfield Savings Bank’s Business Center, serves as the bank’s SBA loan specialist and he frequently assists small business owners with their lending needs.
“North Brookfield Savings Bank is a designated Preferred Lender by the Small Business Administration and we help many businesses to obtain the financing they need to start or expand their small business,” said Rick Egan, NBSB Senior Vice President / Senior Commercial Lender. “We are glad to help business owners meet their goals. If they take the right steps and prepare appropriately then we are able to do our best to find the right solution for them.”
Eligibility requirements for SBA loans can vary from lender to lender and loan to loan but the SBA has some general requirements. The business must be officially registered and operate legally, the business must be physically located and operated in the U.S. or its territories, the business owner has invested their own time or money into the business, and the business can’t obtain funds from any other financial lender.
If you meet those requirements, then it’s time to prepare for a talk with lenders. Here are some SBA recommended preparations to take:
- What’s your business plan?
Approaching a meeting with a potential lender with a strong business plan that details the purpose of the loan and how you’ll pay the loan back in addition to how you’re planning to grow your business will help give lenders confidence that your loan will be put to good use. Don’t have a business plan? Learn some great tips with NBSB’s article “How to write a business plan.”
- Do you have all the documentation you may need?
Having the necessary documents on hand to present to a lender is an important part of being prepared. You will need various legal and financial documents to present to a lender. Like, personal tax returns, business licenses and registrations, articles of incorporation, leases for real estate or equipment, balance sheets, profit and loss statements, business income tax returns and bank statements.
- What’s your credit history?
Lenders use your credit history to determine the amount of risk they might assume when giving loans as well as to determine interest rates. The better your credit history the more “trustworthy” you are in a lender’s eyes and the more likely you are to secure a loan. Want to learn how to improve your credit? Check out NBSB’s article “Suggestions to improve your credit score.”
- What collateral can you offer?
Many potential lenders will require that you use an asset to guarantee your loan. This could be a piece of property or machinery, a vehicle, or other item of significant value that you or your business owns.
Taking these steps to prepare yourself for meeting with a lender will help to boost your chances of securing your loan by putting your best foot forward. To learn more about SBA loans and the application process contact one of North Brookfield Savings Bank’s friendly and experienced business lenders.
We’re always here to help. For additional commercial loan and deposit information, contact the Business Center team at 508-637-7500 or Business@BankNBSB.com.