Franchise Talk

Applying For An SBA-Backed Loan

June 15th, 2009 | Author: Jack

Applying for a loan The Small Business Administration does not provide loans.

Applicants must contact a bank or other lender, which will submit your loan for consideration. The American Recovery and Reinvestment Act raises the amount of money guaranteed by the SBA and eliminates certain fees. Borrowers should be prepared to provide the following information, though banks may not require as much information for all SBA-backed loans:

SBA loan request: The business loan application should be filled out by the business owner; the lender application for guarantee should be completed by the bank or financing institution.

Background info: You need to include some personal information, such as your address, place of birth, any prior convictions and if you are under indictment.

Personal finances: A list of assets, liabilities and real estate owned is required.

Business finances: A balance sheet, profit and loss information, as well as current statements are required.

Financial forecast: Your one-year projected income and information about how you plan to get to those numbers are needed.

Ownership: You must provide names of subsidiaries and affiliates, including ones the applicant has a controlling interest in or may be linked to through stock, franchising, proposed mergers, etc.

Documentation: Provide a business certificate or license.

Loan history: The SBA cannot guarantee a loan if a business has other access to funds from a bank or a private sources. That means a borrower must first go after private financing.

Taxes: Three years’ worth of federal income tax returns must be provided.

Work history: Have personal résumés listing business experience for all main players.

Business history: A explanation about the business, its problems and why the SBA loan is needed are required.

Lease: You need a copy of a lease or a note from a landlord.

SOURCE: Business.gov, the business link to the U.S. government.