Pointers for Getting an SBA Loan for Your Small Business
In order to get your new small business off the ground or keep it growing, getting an SBA loan can make all the difference in the world. The marketplace for loans is competitive, and many lenders have a somewhat stringent screening process for small business applicants. In order to give your small business the best possible odds of getting a loan application approved and getting good terms, there are some important guidelines that you should bear in mind when you’re getting ready to apply.
Consider Applying for a Loan Online
A lot of larger traditional financial institutions offer SBA loans, but they tend to have particularly rigorous standards for new businesses. If you’re just starting your business, you may benefit from looking to the online marketplace to find a lender that has extensive experience in serving small businesses. Applying online is relatively simple, but be sure to review all of a lender’s application requirements and get all of the necessary information together.
Review Your Credit Report and Credit Score
Credit scores can be a big factor in lenders’ willingness to award SBA loans to applicants. Lenders won’t always require that you have flawless credit. They understand that you may have had a rough patch or two as your business was still taking shape, but they’ll want to see that your credit is at least decent. A history of late payments or too many delinquent accounts on your detailed credit report may cause lenders to regard your business as too risky or unreliable. Check your business’ credit score to know where you stand. In addition, you should check your personal credit score. Lenders often want to see that both a small business’ and its principals have an acceptable credit score. If you see any mistakes on your credit report, you should work on correcting them as soon as possible. Simply explaining to a lender that something is a mistake won’t fix the damage; you need to correct the mistake with all three credit reporting bureaus.
Organize Your Financial Statements
Your financial statements give lenders a comprehensive understanding of your business’s ability to manage its finances as well as its financial outlook. It’s essential that your financial statements are detailed, accurate, and convey how regularly your business can generate revenue. In addition, lenders want to see that you control your expenses well so that they can have confidence in how you’ll use the proceeds of a loan.