How to Prepare for an SBA Loan

When you start preparing for an SBA loan or business financing of any kind, you may quickly realize the process can take some planning.  As you prepare to buy or expand a business, acquire a building or start a new business, you may wonder: what do I need to apply for an SBA loan? The following is a list of items to compile so your banker or lender can quickly and efficiently assist in your transaction.

Use of Funds: Your lender will need to understand and collect a detailed description of what the funds will used for. For example, a letter of intent or a contract for a purchase or a budget detailing purchase costs, equipment, working capital expenditures and more.

Current Financial Statements: If you own your own business(es), or are looking to purchase an existing business, we will need to review the financial statements of that business(es). Prepare to send an income statement and balance sheet, dated current within the last 90 days.

Business Tax Returns: If you own your own business(es), or are looking to purchase an existing business, be prepared to send the last three years of business tax returns for all businesses.

Business Debt Schedule: If you own your own business(es), please provide a business debt schedule detailing your current business loans, leases, lines of credit and any PPP/EIDL obligations.

Personal Tax Returns: Plan to provide your last three years of personal, filed tax returns.

Personal Financial Statement: Please prepare a personal financial statement showing your income, assets, and debts. You can ask your lender for a template if you do not have one.

Personal Resume: Lenders always want to understand that you have the experience needed to run your business so please provide an updated resume with your loan package.

Business Plan & Projections: Lenders want to understand WHY you need these funds – maybe you are building a new facility to host more clients or are buying a plumbing business from a retiring owner. Either way, we want to understand your short- and long-term plans for the business. It is best to include income projections with your business plan to help us understand how funding this loan with help your business grow and thrive financially. You can ask your lender for a template to get you started.

Before any lender approves a loan, they need to understand you have the experience to manage the business, the collateral to cover the risk and enough cash flow to repay your debt. While the list of documents described above is a good launching point for your financial package, be prepared to provide additional items to your banker or lender and answer additional questions around your financing request, as needed.

Lenders will also review items such as credit score, history of business owners, financial strength and availability of a cash down-payment into the business. If you think an SBA loan may be in your future, it is best to start taking any steps necessary to strengthen both your personal and business financial profile.

Once you have these items prepared or even if you are just starting to research SBA lending options, feel free to reach out to our dedicated SBA lending team to find out what options are available for you and to assist as you move towards your business financial goals.

InBank is an Equal Housing Lender and Member FDIC.


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