A small business can be the most rewarding challenge of a lifetime. However, such a challenge brings with it an inevitable amount of stress at the company’s inception and as the business grows. The last thing any business owner wants is more anxiety over financing.
The SBA loan process can sometimes have the reputation of being an overwhelming, confusing, and frustrating experience, but taking out an SBA loan shouldn’t add to an already prodigious burden of worries. With forethought and a bit of effort, the process of taking out an SBA loan can flow smoothly. Consider these seven steps to take the SBA borrowing experience from discouraging to delightful:
1. File your taxes promptly. Ask a professional to prepare your year-end financials so you are assured they have been filed correctly. Lending institutions are more likely to be favorably disposed to a borrower who displays obvious organization in their financial filings.
2. Ask for your credit report from all three credit agencies before applying for your SBA. By doing so, you provide yourself the opportunity to correct any blemishes you find there. It also offers the chance to prepare explanations for whatever you cannot correct. Lenders often consider the circumstances of a credit blemish when making a decision.
3. Prepare yourself for snags and delays in the process. Lenders often anticipate small hurdles in the loan application proceedings, but borrowers may find them nerve-wracking. As well as understanding what is on your credit report, you may wish to investigate any liens or similar marks so you have an explanation ready.
4. Take out a life insurance policy. Many SBA loans require them. Having a policy already in place can prevent inconvenient delays in the closing process for your loan.
5. Devote time to your loan process. Whether you choose to do so for a short time each day or opt for longer blocks of time on a weekly basis, it is important to banish distractions to allow for greater focus. You may find this eases the stress of the process.
6. Resign yourself not to negotiate for the approval of your SBA or the closing requirements. Lenders have specific processes in place to guide loans smoothly from application to resolution. Should you disagree with these processes, or find the unique requirements of a lender not to your liking, you should choose a bank that will better suit your needs.
7. Choosing the right bank is integral to the loan process, as well as to your peace of mind. Select a lender that will offer you terms you can feel confident in. Feel free to ask important questions about the bank and its experience with SBA loans. These questions may include whether or not the bank is a preferred lender, how many loans they handle per year, usual turnaround times as well as outliers, and information about the team in place. Do not be afraid to truly interview your lender to ascertain their fit as a partner for your business financials.
CBC National Bank has SBA loans to suit every need! We believe every business is worthy of professional, courteous service and dedication, no matter how large or small. Contact us today for more information on how our services can offer your business a solid financial foundation.
