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Frank X Acocella, CounselPro Lending, on SBA Loan Qualifications
Frank X Acocella, founder of CounselPro Lending, discusses the four things that are needed when applying for an SBA loan
The Small Business Administration (SBA) is a dedicated agency that gives aspiring and existing business owners an opportunity to get access to government loans. As a regulatory requirement, the SBA, as well as other banks and financial institutions that offer credit services, do have a business loan application process. Borrowers are required by law to meet certain requirements before applying for an SBA loan as hereby outlined.
Good Credit Score
Your credit score is highly essential if your application for an SBA loan is to be successful. The credit score evaluates your ability to effectively repay your debts such as loans and mortgages and is used to gauge whether you stand to qualify for a loan or not. The higher your credit score, the better your chances of qualifying. The SBA requires a loan applicant to be above the 600 credit score mark for them to qualify for consideration for affordable and good deals.
Good Business Plan
To qualify for an SBA loan, you need to present a good and strong business plan that outlines how you intend to utilize the loan money once disbursed. The business plan should outline the description of your company or business, the kind of product or service you deal with, the management team involved, an analysis of the industry of your investment, an operational plan, a marketing strategy, and a SWOT analysis of your business.
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Documentation
Documentation is of equal importance when applying for the loan. The SBA requires you to present both personal and business documents. Among the key personal documents that you need to present include your personal identity documents, social security number, business registration papers, bank statements, balance sheets, business and personal tax returns among other licenses and permits. Such documents allow the SBA to build a profile for yourself and your business.
Collateral
The SBA also requires you to present appropriate collateral for your loan for possible leveraging of the loan amount in case you default and are unable to repay. Such collateral may be in the form of personal assets such as real estate properties, equipment, inventory or even personal assets such as cars. You may also be required to undergo appraisal from a valuer to determine the actual value of the collateral presented.