Preparing your SBA Loan Application
The US Small Business Administration is a government department aimed at helping small business. One of the ways they do this is to offer loan programs to small business owners. You’re borrowing from Sound Credit Union, who as an SBA-approved provider, will lend you the money (the SBA guarantees the loan to the credit union).
To help prepare your SBA Loan application with Sound Credit Union, follow these guidelines.
Check your credit rating
Both Sound and the SBA want to be confident your credit rating is strong, so it’s important you’re aware what it is. Identify any blemishes on your personal and business credit report and fix or clear up any inaccuracies. The SBA and your credit union are going to want to know that you’re fully prepared to explain your credit rating.
Regardless of which loan you’re applying for, there’s paperwork that applies to all of them. Getting all of the below organized in advance should speed up the process and demonstrate your diligence.
- Outline your personal background, educational and business experience and your previous addresses going back at least two years
- An updated business plan so the SBA understands your business and strategy, reasons for applying for the loan, planned goals and objectives
- A resume that lays out your employment history, both as a business owner and as an employee. Emphasize evidence of management or business experience, especially if you’re starting a new business
- Any debts or liabilities
- Your contribution to the loan and how you intend to make repayments.
Once you’ve collected the information around the history and state of your business, it’s time to locate the financial documents. The SBA and Sound will want to see:
- Income tax returns for the past 3 years
- Financial statements.
- Any legal documents such as business licenses and registrations, copies of contracts with any third parties and commercial leases, depending on what’s required
- Any loans you’ve applied for in the past, as well as any applications that may have been declined.
There are several forms you’ll need to fill out, depending on the loan you’re applying for. In most cases, you’ll have to complete:
- Borrower Information Form (1919)
This is one of the longer forms you’ll need to complete, and if you have a business manager or another loan guarantor, they’ll need to complete this form as well. It applies to all small business structures. The SBA is looking to determine your suitability for a loan.
- Statement of personal history (912)
You should attach this form to your own personal background information. If you answer Yes to any of the criminal offense questions, it’s also helpful to attach any relevant documentation.
- Personal financial statement (413)
The SBA uses this information to determine if you’ll be able to meet the loan repayments.
It’s always best to check these forms with your credit union representative, or at the very least, get them to review the paperwork before you submit it to the SBA.
At the end of the day, the better prepared you are, the more streamlined the process will be. Remembering that the funds are coming from your credit union, it’s wise to complete your application with their assistance. Not only do they have their own criteria, but as an SBA lender they’ll be able to guide you through the process.
No matter what wave of life your business is in, Sound Credit Union is here for you. Contact our Business Banking team today.