The Small Business Administration (SBA) is a government agency dedicated to small business growth. The organization offers several loan programs for a wide variety of needs and company types, but the SBA does not directly lend money; they partner with banks, community development organizations and micro-lending institutions and set guidelines for how those lenders can structure loans. Each type of SBA loan is unique and involves parameters and stipulations not necessarily offered in other SBA loans. These conditions often revolve around how the money can be used and the terms under which it should be repaid.


Ready to apply? – Now it’s time to get ready to complete and present all the necessary paperwork.  Follow the five steps to a successful SBA loan application1:


Step 1. Know exactly what your business needs are.

Know the answers to these questions:

  • Why do you need the money?
  • How much do you need?
  • How long will it take you to pay it back?
  • What is the current financial health of your business?
  • Do you have collateral to put up?
  • How fast do you need the money?


The answers you give may help determine your best course of action. Once you know how much you need and how it will be used, the better equipped you’ll be to determine the best loan option for your business needs.


Step 2. Know what lenders are looking for.

The 5 C’s of Credit:

  1. Capacity – Can your business absorb unexpected expenses or a downturn in the economy?
  2. Capital – Do your assets outweigh your liabilities? How much capital have you and others invested?
  3. Collateral – This includes accounts receivable, inventory, cash, equipment, and commercial real estate.
  4. Conditions – Certain factors may affect your ability to make payments, such as the economy, industry trends, and pending legislation.
  5. Character – Personal integrity, industry experience, credit history, and good standing are critically important. 


Be prepared to detail what you plan to do with the borrowed funds. Back up your request with facts that support how much you are asking to borrow. Lenders appreciate the effort, and it will give them the confidence they need to trust in your ability to pay them back.


Step 3: Provide and overall financial snapshot of your small business.

Be prepared to present your small business in the best light possible.

Be ready to share details about the financial side of your business. Provide the lender with a comprehensive background on your company, future growth plans and your own personal information.

  • Maintain a good credit score
  • Borrow only what you know you can pay back
  • Present a repayment plan, complete with projections and a safety net
  • Show a history of paying bills on time
  • Provide collateral


Step 4: Choose the SBA loan that is right for your business

The 5 types of SBA Loans:

  1. SBA 7(a) Loan
  2. SBA Express Loan
  3. SBA Microloan
  4. SBA 504 Loan
  5. SBA Disaster Loan


Read more about the 5 types of SBA loans.


Step 5: Complete and present all the necessary paperwork.

  • Get a checklist here.



1All programs subject to credit approval and loan amounts are subject to creditworthiness. Some restrictions may apply. The term, amount, interest rate and repayment schedule for your loan, and any product features, including interest rate locks, may vary depending on your creditworthiness and on the type, amount and collateral for your loan. Bank of America may prohibit use of an account to pay off or pay down another Bank of America account. Repayment structure, prepayment options and early payoff are all subject to product availability and credit approval. Other restrictions may apply.

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