The SBA loan process does not have to be as complicated as banks illustrate it to be in some cases. Here are five things that will help move the application process along so you can have the cash in hand when you need it most.
1.) Gather your financials
To begin the loan application process, you’ll need the last three years of personal and business tax returns, year-to-date profit/loss statement, and your use of proceeds or business plan. Having easy access to your financials or a reliable CPA who can get documents to you at a moment’s notice will help move the SBA loan process along quickly. If you have a CPA who specializes in your industry, you will be a step ahead of the game. They will be able to guide you toward industry-specific deductions and will know what banks will need to close your loan.
2.) Be transparent about your financial history
Divulge any credit, legal, or historic business issues that could impact your loan approval in the initial conversation. A lot of lenders have certain “non-starters,” so ask your lender about any of these items that could derail your loan down the line. The bank will find out about these eventually! Save all parties involved time by being fully honest.
3.) Know that the process doesn’t end with your approval
The closing stage of the loan process–which comes after formal credit approval, is the most time consuming and document-intensive part of the SBA loan process. If your lender leads you to believe that once you are through the loan approval process, things get easier, they aren’t telling you the truth! Be aware that any SBA lender will likely require–depending on the situation–the following before funding the loan: A life insurance policy, financials, leases for your business’ locations, a business valuation, a purchase agreement (if you are acquiring business or commercial real estate with the transaction), corporate documents for the businesses you won, tax transcripts from the IRS and more.
4.) Work with a lender who has experience with your industry
Many banks may want to look at your project. However, If they don’t understand your industry, you will likely be in for a headache when you have to explain in depth both your industry and your business before being issued an approval. You can save weeks to months during the process by working with a preferred SBA lender versus a general processing lender. A bank who is a preferred SBA lender can make its own credit decisions, rather than waiting for the SBA to approve the loan.
5.) Focus on your target close date
As you move through the loan closing process, it is important that you remain aware of the timeline. If you take an extra week to get one of the closing requirements to your lender, it could delay the closing of your loan. Check with your bank throughout the process to make sure you and the bank are still targeting the same close date. If you’re wanting to go with a finance partner you can feel comfortable with the whole way through the funding process, Starcade Capital is ready to earn your business.