A step-by-step guide to getting your paperwork ready for a successful SBA loan application.
“In the fields of observation chance favors only the prepared mind.” - Chemist Louis Pasteur
Hey, do you have a dream of starting your own small business? Do you need some cash to make it happen? If so, you might want to check out the SBA loans.
These are loans that are backed by the U.S. Small Business Administration, (SBA) a government cabinet level agency that helps small businesses like yours get the money they need by setting guidelines for loans and reducing lender risk.
These SBA-backed loans make it easier for small businesses to get the funding they need. So you can then understand why the SBA requires the following documentation.
SBA loans are awesome because they have lower interest rates, longer repayment terms, and lower down payments than regular loans. But they also have some requirements that you need to meet, such as being a for-profit business, operating in the U.S., and having some money invested in your business.
You also need to show that you have good credit, and enough income to pay back the loan. That’s why you need to get your documents ready before you apply for an SBA loan.
Having your documents ready can make the application process faster and smoother, and increase your chances of getting approved. In this article, I’ll show you how to get your documents ready for an SBA loan application in a few easy steps. I’ll also share some helpful tips and resources along the way.
Step 1: Fill out the online application form
The first step to apply for an SBA loan is to fill out the online application form on our website. The form will ask you some basic information about yourself, your business, and the loan amount and purpose. You’ll also need to provide your personal and business contact information, your social security number or employer identification number, and your bank account information.
The online application form is fairly straightforward and should take you about 10 minutes to complete.
However, make sure you have all the information handy before you start filling it out. You don’t want to waste time looking for details or making mistakes that could affect your application.
Step 2: Upload your required documents
Once you’ve completed the online application form, the next step is to upload your required documents. These are the documents that the SBA and the lender will use to evaluate your eligibility, your financial situation, and your repayment ability.
Below is a list of the items needed - please upload these documents ASAP so we may process your application.
A Tip For the Personal Financial Statement (PFS), please ensure all personal liabilities are listed (including, but not limited to: mortgages, credit cards, auto loans, student loans, installment loans, IRS taxes, etc.) and all sections of the form are completed.
Total Assets MUST equal Total Liabilities. The trick is to take your assets minus liabilities, and the difference is net worth. After you add in the net worth, the assets and liabilities should be the same number!
Please watch a video we created on how to complete your PFS here.: https://bit.ly/sbapfs
SBA Loan Required Documents:
Personal Financial Statement (Form 413) - Must be Typed SBA uses the information required by this Form 413 as one of a number of data sources in analyzing the repayment ability and creditworthiness of an applicant for an SBA loan or, with respect to a surety bond, to assist in recovery in the event that the contractor defaults on the contract.
Business Debt Schedule - A business debt schedule is a table that lays out all of your business’s long-term debt. Generally, your business debt schedule should include the following: Most types of business loans, including term loans, equipment financing and Small Business Administration (SBA) loans. Contracts.
Drivers License or Passport
Articles of Incorporation
Operating Agreement or Bylaws
Personal Tax Returns - most recent 2 Years (all pages)
Business Tax Returns - most recent 2 Years (all pages)
Profit & Loss Statement - year-to-date A year-to-date profit and loss statement (YTD P&L) is a report generated to evaluate a company’s operations from January 1st of the year. A YTD P&L is a helpful report to evaluate where a company is in the current year and to compare it to previous years.
Voided Check
Tip #2: Make sure all your documents are clear, legible, and complete. Scan them in PDF format and name them accordingly.
For example, “Personal Financial Statement - John Smith.pdf”. Avoid sending photos or screenshots of your documents, as they may not be accepted by the SBA or the lender.
Step 3: Wait for the SBA and the lender to review your application
After you’ve submitted your online application and uploaded your documents, the SBA and the lender will review your application and determine if you qualify for an SBA loan.
This process can take anywhere from a few a day to a few days, depending on the type and size of the loan, the volume of applications, and the complexity of your case.
During this time, you may be contacted by the SBA or the lender to provide additional information or clarification. Be prepared to respond promptly and accurately to any requests or questions. The faster you can provide the information, the faster you can get a decision on your application.
Step 4: Receive your loan decision and sign the closing documents
If your application is approved, congratulations! You’re one step closer to getting your SBA loan. The SBA will issue a loan authorization that outlines the terms and conditions of your loan, such as the interest rate, the repayment term, and any fees or collateral requirements.
The lender will also prepare the closing documents that you need to sign to finalize your loan.
Before you sign anything, make sure you read and understand everything carefully. Ask questions if you have any doubts or concerns. Don’t be afraid to negotiate or request changes if something doesn’t seem fair or reasonable.
Remember, this is a long-term commitment that will affect your business and personal finances for years to come.
Step 5: Receive your loan funds and start repaying your loan
Once you’ve signed the closing documents, you’ll receive your loan funds in your bank account within a few days. You can use the funds for the approved purpose of your loan, such as buying equipment, expanding your business, or refinancing debt.
You’ll also need to start repaying your loan according to the schedule and terms agreed upon with the lender.
Make sure you make your payments on time and in full every month. If you have any difficulties or issues with your repayment, contact your lender as soon as possible and try to work out a solution.
Applying for an SBA loan doesn’t have to be a daunting task. By preparing your documents before you apply, you can make the process smoother, faster, and more successful. You can also increase your chances of getting approved for an SBA loan that suits your needs and goals.
I hope this blog post has helped you understand how to prepare your documents for an SBA loan application. If you have any questions or comments, please feel free to leave them below.
I’d love to hear from you.
Good luck with your SBA loan application!
