- Current leases: The SBA requires that the property must be at least 51% owner-occupied. If you’re renting any portion of the property, then the loan provider will want to see all existing leases, along with the terms that you and your tenants have agreed to.
- Report on the condition of property: Most lenders will require a report on the condition of your property to see what deferred maintenance items are coming up in the near future. The loan provider will typically want to be comfortable that you have the cash to make any standard facility upgrades or overdue maintenance.
Other SBA Loan Documentation Requirements
If you have a 20% or more stake in any other business or own rental properties, you’ll also need to provide documentation such as financials and the appropriate operating agreements for those businesses. The overall goal is to show a lender that your company is well managed and has an attainable plan for profitability. Prepare a thorough business plan that includes projections of how you expect the business to perform in the next three to five years.
Much of the speed of your application process will depend on your ability to provide timely and accurate documentation to your lender. We’ve developed an SBA loan document checklist to help you get all the information you need to streamline your loan process.
Step 5: Complete SBA Loan Paperwork
After gathering all the necessary documents for your loan, you’ll need to fill out some additional SBA forms to submit with your application. The specific required forms will be determined based on the specific SBA loan type you’re applying for, the intended use of loan proceeds, and your business type. Check with your potential lender, as they may have their own version of these forms that you can use.
(Borrower Information Form): Used for all 7(a) loans, this form is where you note down basic borrower information. (Statement of Personal History): This form is used to evaluate your character. (Personal Financial Statement): This form is used to assess the personal financial standing of you, your spouse (if applicable), and anyone who’s a proprietor of the business. (Fee Disclosure Form and Compensation Agreement): This form is only necessary if you hire someone to help you with your SBA loan application. It details how much you paid them and the services they provided.
Once you’ve completed all of the forms and assembled your supporting paperwork, contact your bank to finalize your loan application.
Step 6: Submit Your Application
SBA loan applications vary by lender but typically will request basic information about you, your business, and the purpose of your loan request. This information helps the SBA get a better understanding of your business and how you intend to use and ultimately repay the funds you borrow:
- Executive summary
- Business profile
- Ownership breakdown
- Management experience
- Breakdown of how funds will be used
- Statement of how loan will be repaid
Most SBA lenders will have different paperwork that you’ll be required to fill out in addition to the SBA’s paperwork. Your application will vary in length, but this basic information about your small business will be required, regardless of which lender or program you choose. This application will be combined with the other supporting documents you have gathered, as well as the SBA forms you prepared, to make up your loan application package. To expedite the application process and to avoid delays, make sure you submit everything in one complete package.
Startups Applying for an SBA Loan
Many startups find SBA loans to be an attractive alternative to taking on high-interest rate debt, like using their credit cards. In FY 2021, 30% of SBA 7(a) loan dollars and 35% of SBA 7(a) loan units went to businesses in operation for two years or less. The SBA’s current strategic plan adds additional emphasis on providing small business loan opportunities to new and emerging businesses, as well as those in rural and urban areas with difficulty accessing loan funds.