Getting an SBA Loan for Your Business

A small business is probably going to need a loan at some point in its development. Trying to get off the ground, dealing with growing pains, or arriving at an opportunity for expansion can all mark key transitional phases in the lifespan of a business. At these junctures, having access to capital resources could be determinative of a business’s success. For many companies, a small business lending program is the ideal option to obtain the funds that they need to hit the next benchmark in their development. To get a loan for your business, good preparation will help you evaluate your best options and present yourself as a strong candidate to lenders.

Consider Your Timeline with Care

Small business lending programs are heavily regulated, so the review process may take longer than traditional types of lending. If you need capital within the next month, an SBA loan may not be the best route. A more short-term solution such as a line of credit could be a better play, but be careful about avoidable interest charges. Consider that both applying and qualifying take some time, so plan accordingly.

Choose a Lender Strategically

You don’t need to work with your local small business association for an SBA loan. Large and small financial institutions alike participate in these types of programs. There’s also a growing online marketplace for small business lending.

Even if you’re not a super-qualified loan applicant, lenders may still be willing to compete for your business. Try to work with a lender that has experience serving companies in your sector.

Put a Solid Application Together

When you’ve identified a good lender, familiarize yourself with the application process so you can assemble a formidable application. Your loan application should inspire confidence in prospective lenders.

A winning application should reflect a meticulous attention to detail. The attached financial materials have to be accurate. Projections about growth or revenue need factual support rather than just wishful thinking.

Review Terms Discerningly

Ultimately, it’s important that you understand loan terms thoroughly before you commit yourself. The terms of an agreement will impact how you run your business throughout the life of the loan term, so you need to choose an SBA loan that meets your short-term needs but can also be manageable in the long run.

In the end, you want a loan structure that will cultivate growth instead of bogging you down with unreasonably high-interest payments. Go into the process of getting a loan with a forward-looking perspective to hone in on the right lending solution for your business.