The SBA Loan Application Process

Small Business Administration Loan Application

The Small Business Administration (SBA) provides a loan to qualified businesses that enables them to finance growth. The SBA provides up to 40% of total project costs, and a participating lender covers the remaining 80%. A personal guarantee is required if the borrower is planning to take out an SBA loan. The small business must have a tangible net worth of $15 million or less, and average annual net income of $5 million or less for two years. The SBA offers two loan programs, one for business start-ups and one for refinancing long-term fixed-asset loans. To qualify, businesses must be in good standing and have been current on their payments for at least 12 months.

Paycheck Protection Program (PPP)

A Washington technology executive pleaded guilty to money laundering and wire fraud in relation to a scheme in which he obtained more than $5 million in PPP loans. The executive submitted eight false PPP loan applications on behalf of six different companies. According to the U.S. Attorney’s Office, the scheme is a form of small business government debt forgiveness. Listed below are the rules and requirements for applying for PPP loans.

SBA express loans

An SBA express loan is a loan with a guaranteed rate that is available to small businesses that are unable to qualify for traditional lenders. In order to qualify for an express loan, borrowers must have a personal FICO score of 680 or higher. Applicants with bad credit may not be eligible for these loans, although they can apply for a loan through alternative lenders. The downside is that the repayment terms are much shorter and the interest rates are higher.

7(a) loans

To qualify for an SBA 7(a) loan, your business needs to meet certain qualifications. Most loans require a 10% to 20% down payment. Larger loans may require collateral, which lenders may reclaim if you default. You can also qualify for an accelerated loan process by partnering with a preferred lender. In order to apply for a loan, you will need to complete several forms and submit them to the SBA. These forms include information about your personal financial history and financial statements for your business.

Personal guarantee required for SBA loans

When applying for a loan, the Small Business Administration (SBA) requires a personal guarantee from at least 20% of business owners. Although it may sound intimidating, this requirement is common in many loans and is part of good lending practices. Providing a personal guarantee protects both lenders and the financial system. In most cases, small business borrowers find SBA loans to be beneficial. An experienced SBA lender can explain the requirements and answer any questions you might have.

Requirements to apply for a SBA loan

Before you apply for a SBA loan, you should pull your business’s credit report. It may be a red flag if the information on your report is inaccurate or incomplete. The SBA also may request that you submit your personal tax returns for the last three years. While building your credit profile will take time, you can begin building yours before you need funding. Here are the requirements you need to meet in order to get the loan you need.