F1 - Applying for an SBA Guarnteed Loan, Step by Step

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APPLYING FOR AN SBA GUARANTEED LOAN

A STEP-BY-STEP PROCEDURE

For new businesses:

 

1.               Describe in detail the type of business to be established.  A business plan is strongly encouraged.

2.               Indicate personal experience and management capabilities and how it relates to the proposed business.

3.               Prepare an estimate of how much the client, or others, intend to invest in the business and how much remains to be borrowed.  By the rule of thumb, thirty to fifty percent (30%-50%) of the client’s capital is required.

4.               Prepare a current financial statement (balance sheet) listing all personal assets and liabilities.

5.               Prepare a detailed projection, or estimate, of the earnings for two years.  Be as realistic and conservative in the estimate as possible.

6.               Make a list of the collateral to be offered as security for the loan, indicating the estimate of the current market value of each item.

7.               Take this material to the banker of the account and ask the bank to consider the loan under the SBA’s Loan Guaranty Program.  If the bank is interested in an SBA Guaranty Loan, they will provide you with the SBA application and related forms.

 

For established businesses:

 

1.               Prepare a current financial statement (balance sheet) listing all the assets and all the liabilities of the business.  The balance sheet must be within 60 days of the application.  An updated business plan is strongly encouraged.

2.               Provide an earnings (profit and loss) statement and balance sheet for the previous three (3) fiscal years and for the current period.

3.               Prepare a personal financial statement (within 60 days of the application) of the owner, or for each partner or stockholder owning 20% or more of the corporate stock in the business.

4.               List all of the collateral to be offered as security for the loan, with the best estimate of the current market value of each item.

5.               State the amount of loan requested and explain the exact purposes for which it will be used.

6.               Visit your banker of the account and take this material along.  Ask the banker to consider a loan under the SBA’s Loan Guaranty Program.  If the bank is interested in an SBA Guaranty Loan, they will provide you with the SBA application and related forms.