Typical Steps for Getting an SBA Loan
Getting a loan guaranteed by the Small Business Administration (SBA) can be time-consuming. Our expert provides lots of SBA-backed financing and has laid out the specific steps you’ll be taking right here.
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Getting a loan guaranteed by the Small Business Administration (SBA) can be time-consuming. Our expert provides lots of SBA-backed financing and has laid out the specific steps you’ll be taking right here.
- The initial interview
Once you decide that your business needs a loan, you need to decide which SBA lender would be convenient and suitable for your borrowing requirements. Once you have narrowed down your SBA loan lender, an officer assigned to your loan is chosen for his or her experience in your type of business. Not many banks have staff with the experience and knowledge needed to make an evaluation. This is a key step, saving time and effort that could be lost with someone less experienced in SBA procedures and regulations.
- Information collection
Once the lending officer has made an initial evaluation of your business circumstances, the information-collection process begins. There are 2 parts to this process. First, collect financial and business data routine to running your business and personal affairs. Most business owners are able to put this information together by simply pulling and copying records from files. Second, ascertain how the funds will work to achieve your business objectives. This is where the SBA loan officer can help get the funds you are seeking. An experienced officer would listen to your business objectives, understand how those objectives can be achieved through your loan, and make it work by selling your loan to the bank and the SBA.
- Bank approval
Since the bank is being asked to lend you the money, the first approval for your loan must come from the lending institution. The SBA guarantees only that you will pay it back, limited to a maximum 80 percent of any default value.
- SBA loan packaging and submission
This is the one step unique to the SBA approval process. Once the lending institution collects the information needed for internal bank approval, your loan is “packaged” and submitted for SBA approval. In many cases, the lending institution is empowered to pre-approve your loan on behalf of the SBA. You get immediate assurance that your loan will close quickly and efficiently.
- Closing the loan
Depending on the type of loan you choose, the closing may be as simple as a visit to the bank for routine paper signing, or it may involve a little more work, such as a title-company closing for a real-estate loan.
Source: Comerica Incorporated (www.comerica.com) is a financial services company headquartered in Detroit, strategically aligned by the Business Bank, Retail Bank and by Wealth & Institutional Management. Contact information: Comerica Tower at Detroit Center, 500 Woodward Avenue, M/C 3391, Detroit, MI 48226; 800-292-1300;hearing-impaired (TDD): 800-822-6546