Our goal at Benchmark Commercial Lending is to provide access to commercial loans and leasing products for small businesses.
SBA loans require a significant amount of paperwork. The SBA loan process takes an average of 60 to 90 days to complete as the SBA and the lender review all of your documents. The specifics vary by the SBA loan program that you’ll be applying to, and the lender you’ll be working with. But there’s some documentation you’ll surely need to submit.
Here’s the paperwork you’ll need for your SBA loan application.
Be ready to provide your company name, age, address, number of employees, date, and other basic company information. This will help the lender determine if your business meets basic eligibility criteria.
Specify the loan amount and use of funds. Make sure that what you want to do with the loan money is an eligible use under the SBA program that you’re applying for.
You’ll submit documents explaining your personal background, such as previous names used and previous addresses. If you have a criminal record, you’ll need information about the type of crime, the jurisdiction that charged you, the date, and the final verdict, etc. A criminal record doesn’t automatically disqualify you from an SBA loan, but you must provide all details about the record.
Some lenders want to see evidence of business and industry experience before approving your loan. You’ll need to submit a resume for yourself and other management-level employees.
Submitting your business plan with your SBA loan application is your chance to show the lender that investing in your business’s future is the right move. In the business plan, you’ll need to explain your business’s product or service and how your business differentiates itself from competitors. You also need to include at least three years of historical financials (if an existing business) and projected financials. Finally, you’ll need to make clear how the SBA loan proceeds fit into the rest of your business plan and growth strategy.
Your personal credit report will let the lender know how responsible you are personally with your money. Lenders view small businesses as “risky” prospects, so the higher your personal credit rating, the more likely the lender is to approve your loan. The lender will be able to pull your credit report by using your social security number, but it’s a good idea to access and view your report ahead of time.
A business credit report will give your potential lender an idea of your business’s financial history. As with the personal credit report, it’s wise to access and view your business report ahead of time. View your business credit rating here.
Personal and business tax returns will verify your personal income and your business’s income. For an existing business, you’ll likely need to produce the last three years’ of tax returns.
Financial statements are another way that lenders verify your business’s financial standing.
Be prepared to submit five financial documents:
Your business debt schedule shows existing loans that your business has that might impact your ability to pay back the loan you’re applying for. Most lenders will ask for the most recent financial statements and one year’s worth of bank statements.
Not all SBA loan applications require collateral. If you have really strong personal credit, and your business is generating a lot of revenues, then the lender might approve you for the loan without any collateral. But in most cases, you’ll have to submit some business or personal assets to back the loan. And if you are offering collateral for an SBA loan, you’ll need to get the collateral appraised and provide documentation on the value.
Note that, even if the lender doesn’t require collateral, all SBA loans require an SBA loan personal guarantee from anyone owning 20% or more of the business. The personal guarantee is a promise to pay back the loan. The lender can enforce the promise, in the event of a default, by seizing and selling off your personal assets.
Depending on the type of SBA loan you’re applying for, you might have to offer up a few legal documents to prove your business’s entity type and legal operation:
These are the basic SBA loan requirements, but make sure you work closely with the lender on any additional requests for information. The more prompt you are in providing information, the more quickly the lender can approve you for the SBA loan.