The Three Steps to Securing Your First SBA Loan

Small businesses are the cornerstone of the American Dream. And for more than 70 years, the Small Business Act, a landmark law enacted in 1953 that established the Small Business Administration (SBA), has been helping Americans achieve that dream. As entrepreneurs prepare to take their dreams from idea to reality or grow the business they already have, the SBA is critical in that path.

But navigating the system can be tricky, especially for those just starting out. As the region’s #1 SBA lender since 1999, we have seen countless businesses come to life, grow and thrive with their SBA loans. The loans offer many benefits for those jumpstarting or expanding a business, most importantly the added confidence of government backing which can help open closed doors. They also can be easier to qualify for, offer flexible repayment options and lower down payments, all of which help with cash flow management.

Choosing the right loan is just the beginning. Partnering with a small business banking team that has deep local knowledge and strong community presence can be a tremendous asset in providing the best lending advice.

The SBA Loan Process

1. First, you will with meet with a SBA advisor to learn about your unique needs and determine the best type of loan. While these loans come in a variety of sizes, from $500 to $5.5 million, there are three main types of SBA loans that you will come across.

• SBA 7(a) Loans are the most common because they are the most versatile and well-suited for a variety of purposes, from funding day-to-day operations to purchasing equipment or buying out a business partner. They offer competitive interest rates, flexible terms for up to 25 years and lower down payments.
• SBA 504 Loans are designed specifically for growing a business. These loans provide long-term, fixed rates for purchases like real estate, machinery or substantial equipment investments. Financed by SBA Certified Development Companies and your lender, these loans help businesses finance significant projects while maintaining stable payments. This loan also offers the highest amount available at $5.5 million for manufacturers.
• SBA Express Loans are ideal for startups or small businesses seeking smaller amounts for small improvements, inventory, or day-to-day operations. Provided through your lenders, they are accessible even to those with less-than-perfect credit.

2. Application Assistance. Your business team will walk you through the documentation needed to streamline the approval process and explain what it takes to be lendable. The following materials will be helpful to have handy as you move forward:

• Business documentation such as tax returns, financial statements and business licenses
• Personal credit information to demonstrate creditworthiness
• Business plans that outline your goals and how the loan will help achieve them
• Available assets such as real estate, equipment, inventory and accounts receivable may be required as collateral for certain loans

3. Our local SBA relationship managers review your application promptly and disburse funds and answer any questions you may have.

Questions are a natural part of the process, and your business bankers can walk alongside you throughout. As you set up your business, your banking team should support and offer guidance along every step of the way. You can set up an appointment to get started on your business journey.