What Are Sba Loans And How To Apply For One

What Are Sba Loans And How To Apply For One



What Are SBA Loans And How to​ Apply For One
Small businesses that cannot secure a​ loan through conventional means can apply for one of​ the​ SBA loans in​ order to​ obtain funds .​
However,​ they must first attempt to​ obtain a​ loan through a​ commercial lender,​ private source,​ or​ bank .​
Once the​ business is​ turned down for the​ loan,​ the​ owner may then apply for an​ SBA loan provided his business meets the​ SBA requirements including its definition of​ a​ small business.
The business must be owned and operated independently in​ order to​ qualify for one of​ the​ SBA loans .​
Additionally,​ it​ must meet the​ predetermined specifications for size as​ far as​ the​ number of​ employees and revenue .​
Also,​ it​ cannot be a​ major company in​ its field .​
If approved for the​ SBA loan,​ the​ owner of​ the​ business is​ expected to​ comply with SBA regulations regarding matters of​ discrimination and public services.
The SBA loan is​ acquired through the​ private sector,​ but the​ SBA (Small Business Association),​ a​ governmental agency,​ guarantees the​ loan .​
The business owner must pledge to​ repay the​ loan in​ its entirety before the​ SBA grants him approval for the​ loan.
Several SBA loan programs are available .​
It is​ up to​ the​ borrower along with guidance from the​ lender to​ determine which one of​ the​ SBA loans is​ best suited for his needs .​
The interest rates,​ typically lower than those offered from the​ private sector,​ vary across the​ different types of​ SBA loans.
When completing your application for an​ SBA loan,​ it​ is​ necessary to​ bring the​ following documentation with you:
• a​ Business Plan- this details the​ type of​ business venture that you​ have and how long it​ has been in​ existence,​ along with the​ number of​ employees,​ actual or​ projected earnings,​ and ownership structure .​
This should include copies of​ business lease and business certificate.
• a​ Loan Request- this details the​ manner in​ which the​ proceeds from the​ loan will be spent.
• Personal Financial Statements- the​ personal financial statements,​ including signed copies of​ federal income taxes for previous three years of​ anyone who owns a​ minimum of​ 20 percent of​ the​ business must be provided .​
This includes owners,​ partners,​ stockholders,​ and officers.
• Business Financial Statements- the​ complete financial statements for the​ business for the​ last three years must be provided including current business balance sheet,​ information on​ subsidiaries,​ projected outlook for income and finances of​ the​ business,​ and signed copies of​ federal income taxes for previous three years.
• Intended Collateral- this details the​ specifics of​ the​ property being offered as​ collateral for the​ SBA loan.
• Personnel Resumes- the​ resumes,​ including personal financial statement and history,​ of​ each major participant in​ a​ high-ranking,​ managerial position might be requested.




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