Get APPROVED for an SBA Loan! (THIS WORKS!)

How do you apply and get approved for an SBA loan? Look, everybody wants an SBA loan. And there's a reason for that because it's an entrepreneur through SBA. You can get a very long-term and a very slow interest rate. So what this means is it means you can get a lot of money for a very small payment. That's why SBA loans are the best kind of loans for us entrepreneurs, but you've also probably heard that they're really hard to get approved for. It's not necessarily accurate. If you know everything you need to know about the application process. So let's dive in right now and talk about what it actually takes and what you need to know to get approved for an SBA loan. So let's start with the beginning. You need to be familiar with SBA's underwriting or requirements that are needed to be able to get approved. So SBA on their website is going to mention some really basic things like anybody that owns more than 20% of the business is going to need to be a signer. You're going to need to have a business that operates here in the United States and the business needs to be for profit, but let's do a deeper dive. Here's what SBA is really looking for. It's basically the three C's cash flow credit and collateral. So first of all, they're going to verify your cash flow through bank statements to P&L's through balance sheets and your tax returns tax returns are really important for SBA loans. You're going to have to have at least two preferably three years worth of tax returns to get approved. They're going to want to see your revenue year after year is increasing and they're going to want to see that you have some kind of profit. If you don't have any profit on your tax returns, it's really hard to get an SBA loan. As a matter of fact, oftentimes the amount of money they'll lend you it correlates with your revenue. It correlates with your profit as well. Now that brings us to the second C, which is credit and there's two sides of this. First of all, you need to have some kind of established business credit to get approved for almost all SBA loans and you need to have good consumer credit as well. You really should have a 680 or 700 or higher type FICO score. No recent derogatory items and absolutely no collections on your credit report unless they're medical collections. If you met that requirement, then you probably qualify for the credit aspect of their application process. And that brings us to the final C, which is collateral SBA is going to want you to have some kind of assets that can be pledges collateral equal to or more than the value of the loan. You're actually getting now. First thing they're going to look at is like whatever assets you have in the business. This could be inventory. It could be equipment. It could even be like account receivables where you let your customers pay you on terms or real estate that you have in the business name. Now that's not enough to cover the actual debt. Then what they're going to do is they're going to look at your personal assets as well. Stocks bonds 401ks IRAs residential real estate vehicles anything you have on the personal side that can be pledges assets. They may ask you for if you don't have enough business assets to be equivalent to the amount that you're actually borrowing. Now, if you have these things the cash flow the credit the collateral chances are really good. You're probably going to be able to qualify and get approved. Now. It's time to move forward with the application process. So the next thing to do is figure out what kind of SBA loan you're actually going to apply for and there's really four main ones that you want to focus on. The first one that primarily is the loan you're going to go for is called an SBA 7a loan. Now, this is for working capital. What that means is it means this loan is for basically most of your general business purposes. So if you're just getting a loan to invest into marketing and payroll and the normal stuff that we do as entrepreneurs, the 7a loan is for you. Now, the second most popular type of SBA loan is called a 504 loan and this is a loan specifically for what SBA calls fixed asset. Typically, it's used for real estate. Sometimes it's even used for utilities or equipment as well. But if you have a fixed asset like real estate, you want to buy you want to refinance you even want to build. This is where SBA 504 loans come in. The next is one that most entrepreneurs know nothing about and it's called micro loans. So SBA actually offers micro loans through its subsidiaries not through banks. It's why most of us aren't familiar with them because if you go to a bank, they're not even going to talk to you about micro loans because they're $50,000 and less and the banks don't make enough money on them to even offer them. But if you go and look at SBA's website for micro loans, you can find where their subsidiaries you can apply through the subsidiaries to be able to actually get approved and these work for newer businesses, even startup businesses. So if you're just getting launched, you don't have a tax returns. This is the right kind of loan for you. And the last kind is for disaster assistance. This is basically things like what we went through through covid. So SBA still does have products where they help us where we get through challenging times like what we saw with covid. So if that is the right one for you, then you want to look at that program. Now, once you've found the right one of these programs that works for you. The next step is let's start preparing your documentation on the personal side. SBA is going to want to do a personal background check on you going to have you fill out a form and they're going to do some research and you need to make sure you answer this accurately if they ask you if you've ever been convicted of a misdemeanor or felony and back 20 years ago. You had a misdemeanor. You need to tell them this because they will find this out when they check your Lexus Nexus credit report. You're also going to probably need to supply a personal financial statement with an outline of where your finances are on the consumer and personal side. And of course, they're also going to ask you for the business financial statements, the most common of which are going to be the tax returns, the bank statements, the profit loss, the balance sheet that we already talked about. They're going to ask you for a business license proving that you can legally do business. They're also going to ask you for a history of other loans that you've applied for. Most importantly, they want to know about what other SBA loans you've obtained so they can research and see how you paid on those as well. They're going to want an overview of your business and they're going to want to resume from you because they're looking to make sure that you have experience in the industry that you're actually operating in now. And if you have any kind of lease like you lease your building now or you own your commercial real estate that your business operates out of they're going to want evidence of that as well. Oftentimes, they're also going to ask you for a business plan. And if you're going to prepare a business plan, make sure it has these eight factors because this is what they're looking for. They're going to want to see an executive summary. They're going to want a company description. They're going to want a marketing analysis. They're also going to want an organization structure of the actual business. They're going to want to know about the products and services you sell and your marketing strategies. They're going to want to see financial projections and they're going to want to see what your funding request is all about. How much money are you looking for and like what do you intend to do with that money? Now, you've done these eight things and congratulations. You have a good business plan that can not only help you get the SBA loan, but can guide you in your business growth as well. Next. You want to apply through an approved lender. Now, I advise that you actually use a loan broker for this process because a loan broker can look at your individual situation and can then determine what's the best lender for you. Look, there's a lot of lenders that do SBA loans some like certain industries. Some don't some like certain loan sizes. Some don't so by lurking through a loan broker. They can look at your scenario and they can find the best lender to place your SBA loan with the credit suite can help you along the way go to credit suite.com forward slash get funding next. You're going to coordinate with that broker to give them all of the documentation that they're requesting to process the SBA loan and don't be surprised that as you get into the application process SBA is going to see things they have question on and they're probably going to have more questions and want more documentation as you go through the process, but the more prepared you are the faster and easier this process is going to be. Look, we successfully get SBA loans in only three weeks time. So it can be that simple. It can be that easy. It's all about knowing this information and be properly prepared by knowing what they're going to ask for and having all this documentation ready to submit the minute you apply once you actually do get everything to the broker. They submit it to the lender. The lender will work through SBA and you will have a tentative or initial approval. This is basically going to be an approval with stipulations that you must meet to complete and actually get funded. These are the questions. They had the further documentation. They need the additional details are going to need to actually close the loan. You get all these things back to them. If those things don't trigger any more questions, then congratulations. You're going to be ready to close. You're going to get your clear to close. You'll be able to close and get your funding in your bank account typically three to five days after this actually occurs. So a couple tips along the way. First of all, prepare for delays. Look, once you do your first SBA loan, you understand what they're going to ask for. Make sure you put all that stuff aside in another folder because your future loans will be way faster and easier when you have everything together that they're going to ask for. So if they ask you a detailed question on something specific about your business, have that answer prepared. So the next time you apply, you already supply that information. So that question never comes up. Now when this happens, the more loans you apply for SBA or other than SBA, then you are going to be prepared. It's going to be really fast and easy to go through these underwriting processes. But the first time you go through expect delays, you're submitting a lot of documentation, a lot of information to SBA. They're going to have questions. They're going to want further evidence of certain things. You have to intend on that happening. You have to expect that you have to be prepared and when you do get those requests get on them quickly, but people often ask me how long does it take to get an SBA loan? My response is always the same that depends on you. Typically, the borrower is the one that burns 70% of a loan process just waiting to get things to SBA or arguing that they don't want to get things to SBA. Look, I have underwritten thousands if not tens of thousands of loans in my lifetime in the consumer and commercial space and I will tell you this big piece of advice. If the broker or lender is asking you for something get them what they're asking for. It only causes delays. If you're creating arguments with them, they got to go back to the lender to get things wait. So only the most difficult things you get stuck on should be things that you work with the lender or broker on actually getting cleared up and not having to provide everything else. Just go to work. Get them what they're asking for quickly, then they may come back with more requests. Get them that information quickly. The faster you do this, the quicker the loan is actually going to close and it makes it possible to even get your loan closed in a month or less. If you as a borrower are acting quickly on getting them the things that they need my other big piece of advice review your business credit report review your consumer credit report before you even think about applying for an SBA loan. If you're watching this and you go tie, I don't even think I'm ready yet. Great. Then start working on building business credit. Now work on fixing your consumer credit now. So when you do have these other things in place, you're ready to apply and you stand a phenomenal chance of getting approved. So there you have it. There's everything you need to know to successfully secure an SBA loan. If you want help along the way then get with credit suite credit suite.com forward slash console. We never charge you a dime of money to help you with getting funding for your business. And the great thing is even if you can't qualify for an SBA loan, we work with over a thousand lenders and over 40 different funding programs. You may qualify for right now. So in order to learn more go to credit suite.com forward slash console and don't forget to grab our free guide on 27 killer ways to get money for your business at credit suite.com forward slash 27. Did you get value from this training? If so, make sure you like and subscribe to keep your eye out for the next training. We're talking about more cool ways to get the money. You need to start and grow your business.