Key Takeaways
- Getting organized before you apply for an SBA loan leads to less stress and faster approvals. Plus, it shows lenders you mean business.
- You can break down the process into weekly tasks that will make things go smoothly.
- Having early conversations with your lender gives you a partner through the process.
If you’ve ever bought or thought about buying a house, you know how much work it can be to get a mortgage. Gathering bank statements, scanning documents, verifying your identity—it can all feel like a lot. But, at the end of it, you have a house!
Applying for an SBA loan feels a lot like applying for a mortgage. It takes a lot of preparation to get your financial house (metaphorically speaking) in order, but you’re not just gathering paperwork, you’re building the foundation for what’s next for your business.
Let’s take a closer look at the benefits of getting organized and a simple 30 day plan to help you get closer to securing the loan you need to grow your business.
Why getting organized matters
Getting ready to meet with your loan officer is an exciting step toward making your business dreams a reality. We want to make sure you feel completely confident and prepared, so we've put together everything you need to walk into that first meeting knowing you've got this.
Here are a few things that make getting organized worth it:
- Faster approvals - When you’re ready with all of your materials, the approval process can go much faster.
- Lower stress - There’s nothing quite like entering a room knowing you’re ready for anything.
- More credibility - If you appear scattered and unprepared, it can look like you’re unsure about your next venture. When you walk in prepared? Lenders know you’re serious about moving your business forward.
If the thought of gathering everything seems overwhelming, that’s where we come in. Even if you’re in the early stages, you can come to us for support and to help you stay organized through the process.
Your 30-day action plan
Each loan will have its own quirks and specific requirements. When you reach out to us early, we can coach you through the specifics of the project and let you know if there are additional materials that we’ll need. However, there are a lot of things that you’ll need to have no matter what.
Here’s a breakdown of what you can do in the next 30 days to get your financial house in order and be ready for your lender meeting. Doing these tasks in smaller chunks makes checking all the boxes a lot easier.
Week 1: Gather your personal documents
Even though you’re getting a loan for your business, lenders need to see your personal financial story, too. Showing your personal assets and liabilities creates a better picture of your finances as a whole.
Your to-do list:
- Collect the most recent three years of personal tax returns. RBAC only requires two, but if you’re partnering with another lender at the same time, collecting three right away may save you a step later.
- Print two months of personal bank statements.
- Prepare a personal financial statement listing all assets and debts. You can use your lender’s form or SBA Form 413.
Week 2: Organize business financials
Both traditional lenders and RBAC will need to see your business financials. These documents help everyone understand where you are now financially and where you’re going.
Your to-do list:
- Collect the most recent three years of business tax returns. As with personal tax returns, RBAC requires two, but traditional lenders require three.
- Prepare a year-to-date income statement, balance sheet, and accounts receivable and accounts payable aging reports.
- Prepare a business debt schedule.
- Gather entity formation documents. This can include articles of incorporation or certificate of formation.
Week 3: Improve what you can
As you’re gathering all of this financial information, you may start to see some gaps or patterns that you can address. Spotting issues with your personal credit report, addressing business debt, handling late payments, and collecting any outstanding invoices can put you in a better position to get an approval.
Your to-do list:
- Pull a personal credit report and verify that everything is correct. You can do this for free at www.annualcreditreport.com.
- Make sure your payments are up-to-date.
- Collect any outstanding invoices.
Week 4: Plan and project
This is where things get exciting. Planning and projecting for the future shows the lender where you’re headed and gets them excited about it, too.
Your to-do list:
- Write a simple one-page business description. This should include your business’s history, your management experience, the products or services you provide. You should also share your key markets, top clients, and competitors as well as what gives you a competitive advantage in these markets.
- Calculate how much funding you need and what you’ll use it for.
- If you are purchasing real estate, ask your lawyer to draft a purchase agreement or letter of intent; if purchasing equipment, obtain quotes from vendors.
- Prepare two years of projections with detailed assumptions.
Get everything organized
Before you meet with your lender, go through the items in the 30-day plan and make sure you have everything you need. Organization lovers will have an advantage here. But even if organization isn’t your strong suit, you can take these steps so everything is ready for your lender.
Before you submit anything to your lender, do this final check:
- Organize all of the documents in digital or physical labeled folders.
- Make sure you can explain your business in two minutes or less.
- Have a clear answer for how the loan will help your business grow.
You know you’re ready when you can say the following:
- “I know exactly how much I need and why.”
- “My financial records tell a clear story about my business.”
- “I can explain exactly how this loan will help my business grow.”
Start today — your future self will thank you
Looking ahead and seeing how an SBA loan could fuel your next chapter? Let's chat about making it happen. While you're pulling together docs and sketching out those exciting plans, we'll help spot anything else your application might need to shine. We’re not just here to process your application, we’ll talk with you, listen to your big dreams for your business, and work alongside you as you achieve them.
Ready to get started? You can start an application online, and we’ll be in touch to get more details and help you move your business forward.
