Receiving a loan backed by the Small Business Administration (SBA) is an attractive option for many business owners. The interest rates are often lower while the time required to repay the loan in full is often longer. Like all business loans, however, applying for an SBA loan requires significant documentation. Below are some tips on how to prepare your application to increase your chances of SBA loan approval.
Start by Choosing an SBA Approved Lender
Your experience in applying for a business loan can vary considerably depending on whether you go to a typical bank or work with an SBA approved lender. The problem with using a traditional bank is that the lenders mostly have experience with mortgage loans, personal loans, and other types of business loans not backed by the SBA. This can mean a long and frustrating application process.
SBA approved lenders are those that have demonstrated a deep knowledge of the SBA, including its policies regarding underwriting and other specific rules. Lenders with this designation have received prior authorization from the SBA to independently approve loans. They submit your loan application to the SBA only for review rather than for a lending decision. This may take as little as 24 hours compared to the several weeks it can take when the SBA must review, approve, or deny an application on its own.
Work with a Lender Who Understands Your Business
Your chances of receiving SBA loan approval increase when you work with a banker who understands the purpose of your business along with its financing needs. You might even consider inviting the loan officer to your business to gain a better understanding of how it operates.
You also shouldn’t hesitate to ask the banker his or her level of experience helping businesses of your type gain SBA loan approval. Lastly, it’s always a good idea to find out the documents your lender requires to give yourself time to locate and organize them to include with your loan application.
Please reach out to Fast Commercial Money today if we can assist you with SBA loan approval or you would like to explore other financing options.