Nearly every business will need to apply for a loan at some point. Whether you need to cover the costs of a vital project, hire new employees, or simply increase your cash flow in the short term, loans can help business owners handle day-to-day operating expenses.
One of the best options available to small business owners is the SBA loan. That’s because SBA loans are some of the most advantageous loans out there. They offer low interest rates, long terms, and provide businesses flexibility and spending power they’d otherwise lack.
However, SBA loans can also prove somewhat difficult to attain. Still, that shouldn’t put you off from applying for one. Especially if you follow these five simple tips to securing an SBA loan for yourself:
Take Time into Account
One big reason why companies fail in their attempts to land an SBA loan is that they don’t properly form a timeline for it.
SBA loans aren’t like other loans, and it can take businesses weeks if not months to gain access to funding if they’re approved. Instead, SBA loans are best suited for long-term plans. Don’t walk into a bank or lender’s office and expect to get an SBA loan to cover expenses for a project that you’re finishing next week.
Research Your Lender
Contrary to popular belief, the Small Business Administration doesn’t actually dole out SBA loans themselves. Instead approved banks and lenders distribute the loans and receive a percentage of compensation from the SBA if any of the loans default.
As such, it’s more important to determine what your specific lender requires than the general guidelines the SBA puts out. The more you know about who your lender is and what they ask of SBA loan applicants, the better chances you have of securing an SBA loan.
Plain and simple, you have to have solid credit to get an SBA loan. But note that your credit –– and your credit history –– doesn’t have to be perfect.
Also, there are a number of measures you can take to improve your credit score. So don’t get discouraged if you’re dealing with less-than-ideal credit at the moment –– you’ve got the power to change it.
Prepare a Detailed Business Plan
Just as important as your credit history is what you plan to use your SBA loan on.
To that end, when you apply for an SBA loan, you should have a well developed business model to showcase how you want to implement your loan, and what it can do for your business.
Including financial projections and competitor analyses can also help bolster your case.
Consult with the Pros
Rather than attempting to fly blind when putting together an SBA loan package, talk to your lender first. Contact the National Business Capital team today and let us help you get on the path to securing an SBA loan. Remember, even if you don’t qualify for an SBA loan, there are plenty of other financing possibilities available to you.
For more information, download our free eBook to see what a little extra funding can do for your business –– and what you’ll be missing out on without it!