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Basic SBA Loan Requirements

The documentation you'll need to show a lender

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You've decided you are ready to run your own small business. You've done your homework, have a business plan, know why unsuccessful small businesses fail and have sworn not to make those mistakes. Now you're shopping for an SBA-backed loan to finance your business. What will you need to show the lender?

Even though the SBA-qualifying standards are more flexible than other types of loans, lenders will generally ask for certain information before deciding to use an SBA loan program. Generally, according to the SBA, a business will need the following documentation to evaluate your loan request:

Business profile. A document describing type of business, annual sales, number of employees, length of time in business and ownership.

Loan request. A description of how loan funds will be used. Should include purpose, amount and type of loan.

Collateral. Description of collateral offered to secure the loan, including equity in the business, borrowed funds and available cash.

Business financial statements. Complete financial statements for the past three years and current interim financial statements.

Personal financial statements. Statements of owners, partners, officers and stockholders owning 20% or more of the business.

The strength and accuracy of your financial statements will be the primary basis for the lending decision, so be sure that yours are carefully prepared and up-to-date.

The most important documents in your financial statements are:

  • Balance sheets from the last three fiscal year-ends.

  • Income statements revealing your business profits or losses for the last three years.

  • Cash flow projections indicating how much cash you expect to generate to repay the loan.

  • Accounts receivable and “payable aging,” breaking your receivables and payables in to 30-, 60-, 90- and past 90-day old categories.

  • Personal financial statements from you and your business partners listing all personal assets, liabilities and monthly payments, as well as your personal tax returns for the past three years.

    Source: U.S. Small Business Administration Buy Books on Small Business Management

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