SBA loans are the best alternative to those increasingly elusive grants for starting or expanding a small business. While some grants are available through the states, these grants are not always “free money,” and most require the recipient to match the funds awarded or combine the grant money with other forms of financing such as SBA loans.
The SBA does not make loans directly to the public. You will need to contact your bank or lending institution to initiate an SBA loan. Your bank will submit your loan package to the SBA and service your loan in the future.
Like any loan, an application for a loan guaranteed by the U.S. Small Business Administration involves forms and documentation. When you apply for an SBA loan to start or expand a small business, you will be required to provide the following forms and provide the documentation listed below.
1. The SBA Loan Application Forms
Application for Business Loan - SBA Form 4
This is the form you, the business owner needs to complete.
Lenders Application for Guaranty or Participation - SBA Form 4i
This form is to be completed by your bank or lending institution.
2. Personal Background Form
Statement of Personal History - SBA Form 912
You and everybody else with a financial interest in your business must fill out this form in triplicate.
3. Personal Financial Statement
Personal Financial Statement - SBA form 413
Once again, you and everybody else with a financial stake in your business must fill out this form.
4. Business Financial Statements
Detailed, signed Balance Sheet and Profit & Loss. Statements current (within 90 days of application) and last three (3) fiscal years Supplementary Schedules required on Current Financial Statements.
5. Projected Financial Statements
Detailed one (1) year projection of Income & Finances. You will need to attach a written explanation of how you plan to achieve the projected income and finances.
6. Ownership and Affiliations
You will need to provide a list of names and addresses of any subsidiaries and affiliates of your business, including concerns in which you -- the applicant -- hold a controlling (but not necessarily a majority) interest and other concerns that may be affiliated by stock ownership, franchise, proposed merger or otherwise with you.
7. Business Certificate / License
A Certificate of Doing Business (If a corporation, stamp corporate seal on SBA Form 4 section 12).
8. Loan Application History
By Law, the SBA may not guarantee a loan if a business can obtain funds on reasonable terms from a bank or other private source. The applicant for an SBA loan must therefore provide proof that they have first sought private financing.
9. Business Income Tax Returns
Provide signed business federal income tax returns for previous three (3) years.
10. Personal Tax Returns
Provide signed copies of personal federal income tax returns for yourself and all principals in your business for the previous three (3) years.
11. Resumes
Provide resumes – including business experience – for yourself and all principals in your business.
12. Business Overview and History
Provide a brief history of your business and its problems. Include an explanation of why the SBA loan is needed and how it will help the business. This is a good place to include a copy of your Business Plan.
13. Business Lease
If you will be leasing space to house your business, you will need to provide a copy of the lease (or note from landlord) giving terms of proposed lease.
14. If Your are Buying an Existing Business:
a. Current Balance Sheet and Profit & Loss Statement of business to be purchased
b. Previous two (2) years federal income tax returns of the business
c. Propose Bill of Sale Including: Terms of Sale
d. Asking Price with schedules of: Inventory, Machinery and Equipment, Furniture and Fixtures
More Forms and Information
As you go through the SBA loan process and in your future dealings with the SBA, the need for several additional SBA financial assistance forms and information may come up.
