How to Get an SBA Loan
Need some extra cash to get your small business up and running? Here are some ways to get a loan approved by the U.S. Small Business Administration, or SBA.
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You Will Need
- Internet access
- Advice from a lender
- Your credit history
- Collateral
- Equity invested in your business
Steps
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Step 1
Go to the SBA website
Go to the SBA website to learn the basics about obtaining financing to start up or buy a business. Do this before applying for an SBA loan.
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Step 2
Evaluate your business' financial needs
Evaluate your business' needs. For example, understand your financial level of urgency, the amount of risk you're willing to take, and the stability of your business' market niche.
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Step 3
Get advice from a commercial lender
Ask a commercial lender about typical requirements of a small business loan such as your credit history, any collateral to assure repayment, or any equity already invested.
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Typical commercial lender requirements will apply to any SBA guaranty loan.
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Step 4
Calculate all your business start-up costs
Calculate your costs to start up or buy a business before applying for an SBA loan. The SBA website offers a variety of financial statement templates. Don't expect any "no money down" loans.
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Step 5
Ask a commercial lender to consider your loan
First, ask a commercial lender to consider your loan request. If you're not approved, ask to be considered under the SBA loan guaranty program.
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Under their loan guaranty program, the SBA can guarantee up to 85 percent of a small business loan.
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Step 6
Know about types of SBA loan programs
Know about types of SBA loans. The microloan program offers short term loans up to $35,000. The Patriot Express offers loans to businesses 51 percent owned by military vets.
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The SBA offers a surety bonding program for small business building contractors.
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Step 7
Know about the SBA Venture Capital Program
Know about the SBA Venture Capital Program run through SBIC, Small Business Investment Companies, for entrepreneurs that don't want to go through banks. Find an office near you. Now get that business off the ground.
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In 1980, Tim Paterson sold his computer operating system to small businessman Bill Gates for $50,000. Gates then licensed DOS to IBM.
