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Apply For An SBA Loan

Oftentimes when we start working with a customer to secure an SBA loan, they are worried about the length of the process and amount of paperwork. But that’s why it’s important to apply for an SBA loan with an SBA-preferred lender, like First Commonwealth. We’ll first get to know your business, your goals and your objectives, and then take steps to help you prepare to apply for an SBA loan and be available to support you through the SBA loan application process.

Each  loan will have a specific checklist for your application from the SBA. However, here is some general information about applying for an SBA loan that is applicable to all loan types.

How SBA Loans Work

The SBA works with lenders through the country to provide loans to businesses that meet certain eligibility criteria. The SBA itself doesn’t lend money directly to the owners of the small business, but rather it sets guidelines for the loans that are ultimately made by the lender. So while when you apply for an SBA loan it’s submitted to the SBA for review, it’s ultimately funded by the lender.

Preparing to Apply for an SBA Loan

The first step for applying for an SBA loan is finding a lender that offers the types of SBA loans your business will need. Ideally, you should work with an SBA-Preferred lender like First Commonwealth, who is equipped to help you throughout the entire process. When you connect with our SBA team, we’ll take time to learn more about your business and goals, and then help you understand items like the rates, terms and fees of the SBA loan we recommend you apply for.

It’s always good to have a basic understanding of the eligibility requirements of an SBA loan , and of course our team will answer any additional questions you may have before applying with the SBA.

Here are a few things that we’ll review before applying for an SBA loan:

  • Your business plan. If you need to create one, we’ll direct you to a free resource for creating a business plan from the SBA.
  • How much capital you will need and how it will help your business to grow.
  • Your credit history, so we can understand credit risk and help determine interest rates.
  • Financial projections. We’ll want to understand the finances behind your business and how you plan to pay back the SBA loan you are planning to apply for.
  • What collateral you’ll use to secure the loan.

SBA Loan Application Documentation

Regardless of which loan you’re applying for, there’s paperwork that applies to all of them. Getting all of the below organized in advance should speed up the process and demonstrate your diligence.

  • Outline your personal background, educational and business experience and your previous addresses going back at least two years
  • An updated business plan so the SBA understands your business and strategy, reasons for applying for the loan, planned goals and objectives
  • A resume that lays out your employment history, both as a business owner and as an employee. Emphasize evidence of management or business experience, especially if you’re starting a new business
  • Any debts or liabilities
  • Your contribution to the loan and how you intend to make repayments.

Once you’ve collected the information around the history and state of your business, it’s time to locate the financial documents. The SBA and your bank will want to see:

  • Income tax returns for the past 3 years
  • Financial statements.
  • Any legal documents such as business licenses and registrations, copies of contracts with any third parties and commercial leases, depending on what’s required
  • Any loans you’ve applied for in the past, as well as any applications that may have been declined.

Starting Your SBA Application

Our team of bankers will start the SBA application process with you. Depending on the type of SBA loan we recommend for your business, we’ll review a loan application checklist and answer any questions that you have.

Additional Resources to Understand Applying for an SBA Loan

On occasion, the SBA hosts virtual and in-person sessions on how to apply for SBA loans. Be sure to visit the SBA site and sign up for email updates so you know what’s happening nearby.

Getting Started with Your SBA Loan

While this is quick outline of the process to apply for an SBA loan, we’d love to learn more about the needs of your business and determine if the SBA is the best route for you. And if not, we have a full suite of business financing solutions to help position your business for growth.

Contact our SBA team today to learn more or schedule an appointment to find out additional ways we can support your business.