Acquiring a government business loan involves many methods and requirements. For whatever business cases it may be, you would need to do lots of preparation and undergo strict screening processes.Since this may be hard for some borrowers, let’s start to check on how we can get this done. Here are the steps on getting a government business loan:
Check out on SBA
SBA (Small Business Administration, U.S.) helps business owners to get loans or a starting capital. They are the one who serves as a guarantor in case that the borrower can’t pay the loan. Due to risks that are being taken by the government, it is not that easy to have an approved application.
Prepare the documents
There are lots of documents that you have to submit to SBA for a loan application. If you are just starting to open up a business, you would need to prepare a business plan. You have to show every detail to SBA to give them a clear view of your ideas about the business. All applicants must also provide three years of personal tax returns, contract agreements and required licenses. Here are other documents that you need to submit to SBA.
For starting companies:
- Type of business
- Products and services you will provide
- Analysis on how business will succeed on current market
- Financial projections in next three years
For established business:
- Business profile with activities, number of employees, license certifications and partnership agreements or incorporation articles.
- Balance sheets
- Profit-and-loss statements
- Tax forms and projected earnings
- Schedule C (Form 1040) and other worksheets
Choose the right lender
The SBA has a list of lenders who participate on loan programs of the state. Even though you can choose from the list of companies, choosing the right lender will give you a better chance of approval especially if the lending business is familiar with the type of business you’re running. Conduct a research about the lenders to find out.
Finalize the loan application
Request the SBA loan application from your selected lender. Provide complete information about you and your personal finances. You would need to include financial statements with your debt and other income. You also have to explain the purpose for you loan and your plan on how you can pay for it.
Submit your application
Ask your lender for rules and processes on submitting an SBA loan application. Make sure that all required documents are attached and you followed the instructions to avoid delays or rejection of your loan. After submission, you just have to wait for the decision and further instructions on getting your loan money.
It is very necessary to have funds for your business so getting a loan is very helpful. Be mindful that all debts should be paid and you have to establish a good credit history for a higher chance of approval for future loans.