SBA Loans Explained

Maybe the most under/misunderstood commercial finance product is the SBA Loan.

Did you know the SBA doesn’t make loans?

That’s right, the SBA is a government-run program to promote small business through the guarantee of loans for business operators. Not only that, there are different types of SBA Loans and in some situations, you can get an SBA approved with no money down.

In the video below Phil Dushey, a 30 year veteran of commercial finance, and the founder of Global Financial Training explains the SBA loan and how to use it in successful strategies.

Augustine Capital Solutions is proud to team up with Global Financial and Phil Dushey to offer preferred lending in SBA Loans and other financial products that allows us to bring more value to our clients.

Contact Us and let us guide you to a successful SBA loan submission with our network of preferred lenders that often get our loans approved in 30 days or less.

SBA Loan Getting Approved

The Small Business Association is a government agency that offers assistance in many ways to small businesses. One of the ways it offers help is through its multiple SBA loan programs. These are basically loans that you can get through your typical lenders, but they are backed or guaranteed by the SBA. This lowers the risk for the lender, making it easier for small businesses to get loans.

To qualify for this type of loan, you need to meet the requirements of the bank and the SBA. Here are six steps you can follow to help you get approved.

Step 1: Get Documents Together

Doing this first and knowing what documents you’ll need will get you farther, faster, then any other item on your list. You’ll need these throughout the process to prepare and apply so getting it done up front irons out your internal process as well. You’ll need your financials as well as your entity and organizational documents including identification and filings. Remeber to include all your business partners.

Step 2: Decide on a Lender

Choose your lender wisely and pay attention to the fine print. Matching your business to the right kind of lender will greatly improve your chances for approval. Established relationships are great, but sometimes you’ll need to make new ones. Shop smaller and community banks they can be more flexible with their lending and are more likely to take on your loan.

Step 3: Meet the Requirements

You’ll have to meet the requirements of the SBA  and the requirements of your lender. The SBA can be very specific on the type of business, the type of loan they will guarantee, and the amount to lend. The SBA really focuses on businesses that normally qualify for traditional bank loans so its necessary to reduce risk wherever possible. You’ll also need to make sure you meet the requirements of your chosen lending institution, these are not always the same.

Step 4: Have A Business Plan

Paint a clear picture of your business, your industry, your market and your experience. Make sure to be detailed and form a vision of how your business will be profitable and handle the risk and challenges that are sure to be common in your marketplace. It may be beneficial to seek professional help from accredited business plan review and creation firms that have experience and a strong track record of SBA approvals.

Step 5: Prepare Your Financial Reports

For an SBA Loan, don’t rely on just on your business plan. If you have an existing business review your financials carefully and always include them in your submission. Tax returns and bank statements are a great way to demonstrate your cash flow and earnings. You should also be able to show and answer questions on existing or previous debts and loans. Include forecasts on how the loan will help you produce revenue and grow your business as well as how you intend to use the financing when you are approved.

Step 6: Completely Fill Your Application

Finally, you’re ready to apply, but not done yet. Be thorough, detailed, and diligent in your application. Missing information is the most common cause of returned applications. Be sure to ask questions if you don’t understand an item or are unsure of how the entries will affect the submission process. A good rule of thumb is to not leave anything blank.

Augustine Capital Solutions is usually able to close some SBA loans in as little as 30 days with our network of preferred SBA lenders and commercial finance consultants. Contact Us to get your SBA loan started and approved with the right kind of know how.

Learn more about SBA Preferred Lenders at SBA.Gov