Michelle Orr is a Business Development Officer at Wells Fargo SBA Lending in Shelton, CT.
With interest rates at record lows, many small business ow ners are seizing this
moment to grow their businesses. When the time comes to open or expand a small business, countless small business owners select the benefits of a Small Business Administration (SBA) loan for their financing needs. These guaranteed loans provide high-leverage financing with low down payments for qualified borrowers. While the process of applying and successfully qualifying for a SBA loan is no different than any loan process, here are a few helpful tips that should simplify your trip to the lender:
Tip #1: Be Aware
Gather all of your personal and business financial records for the past three years (tax
returns, financial statements, etc.) and make a copy of this package for the lender. Also, be aware of your credit standing. If there is any derogatory information on your credit report, prepare a letter explaining what happened and why the problem will not occur again.
Have a specific dollar amount in mind and the paperwork to show how you arrived at this amount, how you will use it, and how you will repay it.
Tip #3: Know Your Business
Identify your company's strengths and weaknesses in advance. Depending on the severity of any particular weakness, you can often overcome it if you are prepared with a particularly noteworthy and compensating strength. The key is to be prepared.
Tip #4: Do Your Homework
There are many specialized loan products available to small business owners, including various SBA 7(a) and 504 loan programs. Be sure your lender offers the program that best suits your needs. For example, only a few select lenders offer fixed rate options on SBA 7(a) loans. With interest rates at record lows, this is an attractive option for many businesses.
Tip #5: Start Early!
Once approved, a loan may take anywhere from 30-60 days to fund. Borrowers can minimize time by supplying all of the necessary documentation up front and any additional information requests as quickly as possible.
SBA loans are available through Wells Fargo SBA Lending and other participating SBA lenders across the country. Be sure the lender you choose has Preferred Status (PLP) with the SBA, which can greatly expedite the entire process. Like any other type of lending, SBA lending is a specialty. Experienced SBA lenders fully understand the products, parameters, SBA eligibility requirements, and documentation process.
https://www.wellsfargobusinessinsights.com/business-financials/lending-resources
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