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The Beginner’s Guide to SBA Guaranteed Loans

While the federal government is not in the business of making loans to small businesses or startups directly, that doesn’t mean it doesn’t have a hand in helping small business thrive. The Small Business Administration is the government’s vehicle for help small businesses, and it does much in the way of helping those that own or want to start a business.

They offer help and support from start to finish, including financing. Whether it is a startup loan, venture capital, surety bonding, or an equipment loan, the SBA lending programs offer business loans specially designed for small businesses. How does one get a loan with the SBA?

Find an SBA Partner Lender

The SBA does not lend money directly to borrowers. Rather, they run financing programs, set the guidelines for loan qualifications under such programs, and partner with lenders to make the loans to qualified borrowers. The SBA guarantees these loans, allowing lenders to lend funds to borrowers they might not otherwise consider because their risk has been reduced by the SBA guarantee. It is important to remember that the guidelines change frequently due to government oversight, so always check rather than relying on past information when applying for a new loan.

Application Process

The first step in the application process is to find an SBA lender. This information can be found on the SBA website. Once a lender is found, you can begin the application process. The SBA has one of the most comprehensive application processes out there. Don’t be afraid to ask for help during the process. It helps to prepare before you begin by writing a great business plan and cleaning up your financial statements.

Information such as the borrower’s relevant experience, market research, location, allocation of loan funds, and budget projects will all need to be included. The SBA offers guidance and a template for those seeking to write their own business plan. However it comes together, a professionally written, complete business plan is a must for any loan, including one backed by the SBA.

Top Lenders

Forbes.com published the following list as the top SBA lenders of 2012:

Wells Fargo
U.S. Bank
Chase
Live Oak
Huntington
BBVA Compass
TD Bank
Key Bank
BBCN

What are some other major questions you have about SBA loans?

This article was originally published by Biz2Credit

Published: September 12, 2013
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