SBA Loans Requirements

The SBA loan is a government-sponsored loan from financial institutions such as banks and credit unions. The SBA does not lend directly but, in case a borrower defaults, they can cover such loans. It makes the SBA loan an appealing choice for borrowers, as it reduces some of the risk involved. The SBA loan may be used for a number of items, like purchasing real estate or property, machinery, working capital, debt refinancing, and — of course — for purchasing a company like yours..

Since your lender would require SBA approval to back your loan, the procedure for applying for an SBA loan, due to the enormous amount of paperwork, would be lengthy. Such loans, however, usually offer better terms than conventional small business loans, and often also come with advice to ensure that the company is running efficiently.

Who qualifies to obtain the SBA Loan?

In general, to apply for an SBA loan, you need to be the prime borrower. Nevertheless, obtaining a loan to purchase an existing company is usually better than getting a start-up loan to get a brand new business off the ground, as lenders can see the track record of the business that you want to purchase.

SBA loans requirements have very attractive interest rates, terms of repayment and cost of closing, but they have more stringent qualification requirements over other business loans. In generally, to qualify for a loan, you will need to fulfil these SBA loans requirements:

• Your credit score should be at least 690;
• A credit record free of any bankruptcy in the last three years;
• At least 10 percent down payment;
• In the case of franchisees, a franchise fee paid before the full loan funds are released;
• A very clean criminal record, or the ability to be able to explain any misdemeanors reflected in your record; and
• Non-current federal debt industry

The U.S. Small Business Administration is a federal agency dedicated to promoting the growth and advancement of small companies and partners in their loan programs with lenders nationwide.

To get the loan, you’ll also need the typical business loan documents, including a personal financial statement and a financial statements business plan. Furthermore, it is difficult to predict how long the loan process could take, because each loan is special. With a smaller sum, which has a quicker processing time, you may want to ask your lender about a small business loan.

How it works

Unlike normal term loans, an SBA Loan today offers business owners a great opportunity to take full advantage of favorable terms as a part of your SBA programme, all this, while removing a part of the barriers to regular financing options.

We are a preferred SBA lender, and our program offers an improved lending process for businesses who have been operating for less than 2 years, with reduced paperwork. We tailor SBA loans according to the business owner’s unique needs. The funds could also be used for purchases of vehicles and refinancing, purchases of equipment, working capital, including inventory and most other general business requirements.

The Small Business Administration, a governmental entity dedicated to small business growth, partially guarantees a SBA loan. TD Bank, processes your request and provides you with the funds. This partnership allows for flexible solutions in financing.

Who can apply:

• Any small business owner may apply for an SBA loan, whether you have excellent credit or are not eligible for a traditional commercial loan.

Typically, you enjoy favorable terms

SBA loans offer flexible terms and conditions as compared to conventional loans. That can mean lower monthly repayments and more opportunities to keep your business capital.

How much of a SBA Loan can you get?

SBA loans amount to a maximum of $2 million, with a SBA loan guarantee amounting to no more than $1.5 million (75%). SBA lending terms are 25 years for real estate and machinery, and 7 years for working capital. Interest rates are dependent on the prime rate, the lending size and the loan maturity.

Eligibility requirements for a loan

To be eligible for the SAV loan, your business must be defined by the SBA as a small business. You need to be working within the U.S. You need to show that the money is to invest in your assets for your company, and you need to show that the loan is for a sound business reason.

Many types of companies are exempt, with the exception of real estate and other financial companies, lending firms, pyramid selling firms, unlawfully engaged firms and non-profit entities.

Loans may be used to purchase land or structures, equipment, machinery or materials, for long-term or short-term working capital, for refinancing, or for the acquisition of an established company.