Requirements to acquire a loan through the SBA

If you have made the decision to start your own business, you will need to make the decision to work hard to make the business attractive to lenders. You want lenders to feel that this is a risk-free investment and that they will be able to acquire great profit from your company. To do this, you have to do your homework and you must be able to show lenders what they want to see in order to have a desire to invest in your company.

Since not too many lenders are anxiously waiting to offer you money, your best shot at acquiring financing is going to come through the Small Business Administration. When you apply for an SBA loan, you will need to pay for of the start-up costs using your own funding and then they will be able to provide you with the rest of the money that you need. This is the best way to reduce the risk to the lender and it's a great way to show the lenders that you are invest into the company.

So what information is the SBA looking for and what do you need to provide them with? You should already have a business plan ready to provide to the lender. The business plan provides an overview of your business and allows lenders to see what your business is all about. Include your marketing plan that will allow lenders to see just how you are going to bring in money for your business.

According to the SBA, their loans are more flexible from other loans. The loans vary based on your need and if you meet the qualifying conditions. Here are the documents that the SBA will ask you for when you apply for a loan:
1. Business profile. This includes a brief description of your business along with the numbers that lenders need to see if you will be able to repay the loan. They will ask for your annual sales numbers along with the number of employees you have. Don't forget to include the ownership structure of your business and also the length of time you have been in business.
2. Loan request. Your next process includes providing a description of how you will use the money. You want to ask the lender for the loan amount and then show them where all of the money is going. This includes the purpose and type of loan option you would prefer to have.
3. Collateral. After you provide the lender with the loan option you need and the business information they need, you have to offer a piece of collateral that is desirable to the lender. This can be anything from business property to your own home. Just know that the lender has the right to call in the collateral if you default on the loan. This leaves your home vulnerable or other assets vulnerable.
4. Financial records. Lenders will ask for a copy of your business financial records. You must have about 3 years of financial record to provide to the lender and don't forget about your current financial records. You also need to have your personal financial statements included with the business statements for lenders as they make their decision based on your personal spending habits as well.

Update your records often in order to keep them accurate. This will make it easier when you do apply for a loan as you don't have as much to deal with when it comes to updating your records and preparing them for the lender to review and make their decision as to whether or not you are loan worthy.