How to Make Sure You Get Approved for an SBA Loan
Getting approved for any loan can seem like an overwhelming process. If you’re applying for the SBA 7a loan, you know that this type of loan requires just as much proof and work as taking one out at a traditional bank. If you’re investing this much time, it’s understandable wanting to get approved. Here are some tips on how to ensure everything is ready and you increase your chances of being granted the loan you need to get your business off the ground.
Know the Dollar Amount Needed
Many people don’t get approved for the SBA loan they’re looking for because they don’t know how much they want to ask for. While trying to get the full amount of the loan you’re approved for sounds tempting, it can wreak havoc with finances. Ask only for the amount needed to give the business the boost needed. It can help avoid problems in the long run and help build trust with your lender.
Complete a List of Full Collateral for the SBA 7a loan
If you want to establish trust with a lender, make sure to provide a list of all the collateral you feel comfortable using to help back up your loan application. While some folks feel unsure about using assets for these purposes, in theory, there’s nothing to worry about losing as long as the loan gets paid back in a timely manner.
Ensure Credit is Clean Before Applying
Another mistake that’s common to make before applying for a loan is not checking out credit. Both banks the SBA are notorious for wanting applicants that have good credit. Even if individuals think there’s nothing wrong with their credit record, it pays to check it out beforehand and see if there are any possible mistakes. Focus on fixing those before applying to the SBA.
Keep a Consistent Cash Flow Before Applying
A consistent cash flow, either to the business or the individual taking on the loan, is necessary to show the SBA the loan will get repaid quickly. This is reassuring for any company granting a loan, but especially the SBA, who puts careful consideration into the who they offer a loan to.
When applying for an SBA 7a loan, it’s important to maximize your ability to get approved. Provide a full list of collateral you’re willing to use to improve your chances. Make sure credit is clean before applying and check cash flow to make sure it shows a steady income. Know the dollar amount needed, and don’t ask for more than is necessary. These simple steps can go a long way in building trust and getting approved.