Are You Ready For An SBA Loan?

Posted in: SBA News, Federal Government
By US Business Finance Corp.
Jun 18, 2008 - 1:20:22 PM

SBA Loan Application

US Business Finance Corp helps small business owners get working capital for their enterprises. Often, new business owners hear of Small Business Administration (SBA) loans, and wonder if it is a good business financing option. An SBA loan is one that is largely backed by the government and funded by one of your local financial lending institutions. SBA loans are very helpful if you have applied for a loan and showed your ability to repay the loan, but were turned down due to reasons such as requesting a longer repayment period, amount of funding requested, newness of business or insufficient collateral

To quickly assess the SBA Loan option, a business owner must provide the bank the same documentation as for a normal business loan:

  1. Business profile: Includes ownership, type of business, annual sales, number of employees, and how long in business.

  2. Loan request. Describe how the loan funds will be used, including purpose, amount and type of loan.

  3. Collateral. Description of assets offered as collateral to secure the loan, including equity in the business, borrowed funds and available cash.

  4. Business financial statements. Immediate three previous years complete financial statements (Balance Sheet and Profit & Loss Statement) and current year's interim financial statements including projected cash flow.

  5. Owners personal financial statements. Statements including any partners, officers or stockholders owning 20% or more of the business.

The SBA program examines five areas to determine if your small business is healthy. First, how much the owners have invested in the business, Then that each month there is more cash flowing in than flowing out (the cash flow projection) and how much working capital the business has. The collateral is fourth on the list - and collateral is demanded of any owner with greater than 20% ownership of the business. Lastly, the "character" of the owners and officers, which includes their education, prior business accomplishments, motivation and experience

If the SBA loan requirements are still too restrictive for your new business, US Business Finance Corp offers its Business Cash Advance program to help new businesses get their financing. With a business cash advance, companies can get business funding that acts as a draw against future credit card sales. Also unlike a bank loan, US Business Finance Corp historically wires approved business owners the cash advance in 5 to 10 business days.

If your business is too new or your collateral position not what it needs to be for an SBA loan, contact us to see what business funding we can arrange for you. We are specialists helping new businesses, restaurants, and typically high-risk rated businesses find the funds they need when they need them most.