Any small business owner knows it isn’t easy to qualify for an SBA loan. They’re one of the best ways to fund your business, but they’re also, often, a big source of stress for anyone who wants one. However, despite some of the headaches, the application process doesn’t have to be daunting. If you head into it prepared, you can definitely acquire the funding you need to get your business where you want it to be. So, it’s important to be organized and show any of the potential lenders that they can rely on you to uphold your end of the bargain. Here are the best tips for obtaining an SBA loan.
Best Tips For Obtaining An SBA Loan
- Organize All Relevant Documentation
- Make Sure You Have Good Credit
- Know Why You Need A Loan
- Prove Your Business Is Making Money
Organize All Relevant Documentation: Best Tips For Obtaining An SBA Loan
When you take the plunge and apply for an SBA loan, it’s important you have all of the required documentation. On top of that, it’s best to be as transparent as possible. Lenders will find out one way or another before they hand over money, so it’s best to be straightforward.
Double-check that all of your financials, taxes, and accounts are accurate and representative of your current status. It’s important for your business to have a system in place keeping records up-to-date.
Make Sure You Have Good Credit: Best Tips For Obtaining An SBA Loan
Ultimately, when it comes to SBA loans, you need to have good credit. Banks and lenders won’t even consider you if you have anything less than 600 – 800; with the ideal being 680+. So, if you’re considering an SBA, make sure you’re paying everything you owe back on time. Otherwise, you’ll have poor credit and won’t qualify.
Beyond that, it’s important to know some lenders can make hard inquiries on your credit. When they do that, it can actually deduct points from your score. However, there are also places that only do soft inquiries that don’t hurt your credit. Either way, your credit will make or break whether you can get funding or not.
Know Why You Need The Loan: Best Tips FOr Obtaining An SBA Loan
It’s not as simple as “your business needs money.” You should consider why you need the loan. What’s causing the bottlenecks in your operations? Would different loans that have less demanding applications and requirements work better? It’s good to think about questions like these. SBA loans are great, but if startup loans or lines of credit fit what you need a little more, consider those instead.
Also, how soon you need the money may also impact your decision. SBA loans can take anywhere from two weeks to two months for approval. So, if you need funding sooner, an SBA may not be the best choice.
Prove Your Business Is Making Money: Best Tips For Obtaining An SBA Loan
To qualify for an SBA loan, you need to have an existing business. Beyond that, you’ll also need to provide substantial proof that your business nets you a profit on a monthly basis. Lenders often check this by looking into any existing debts you may have as well as your tax returns. However, if you’re looking to start up a new business, again, an SBA may not be the best choice. Luckily, while SBAs provide the most money at the best rates, there are plenty of other loans.
Finance Factory Can Help Fund Your Business Quickly!
Looking at the best tips for obtaining an SBA loan? Finance Factory would love to help! If you’re looking to fund your business and have a credit score of 660 or better, let’s chat! Get pre-qualified right now with our quick-step pre-qualification form! And don’t worry, this will not result in a hard credit inquiry of sensitive information. We just want to learn more about you and your business. Click below to start!