By Jeff Rauth. Email Here or 248 885-8797. SBA Loan Officer at a Bank That Lends Nationally. 15 Years Commercial Real Estate Experience. Past Commercial Mortgage Broker.
You’ll find practical advice on the SBA loan application process, as well as downloadable versions of the SBA forms, on this page.
SBA Loan Application
If you’re looking for actual SBA loan forms, see below. Here, we are going to describe the general application process and how we recommend you go about the process.
1. Make initial contact with lenders/banks that focus on SBA loans and try to get good initial feedback that your project fits there area of lending. Also, try to avoid banks/lenders that only dabble in SBA loans as this can cause a lot of problems for you, down the road, as their lack of experience can literally add months onto the process.
2. Send in the full package to the lender (see list and forms below) after it seems like you have a deal. Get a general sense of what terms they can offer. Give them a week or so to fully analyze the loan request.
3. You should receive a Term Sheet from the lender highlighting the proposed loan. Once you sign this and send in the deposit, which is normally $2,500, you are officially in “process”. This is a huge step. Many prospective borrowers never get this far and don’t ever receive a term sheet. Most banks don’t just lightly send these out. It’s only after a thorough review that they offer you a term sheet.
4. Next step is to answer detailed underwriting questions. This process can take a few days to weeks, especially if the borrower is slow to respond.
5. After all of the underwriters questions have been answered the next step is having your loan APPROVED (commitment letter). This is by far the biggest step in the SBA loan application process. 95% or so of SBA loans that get approved, close. Most deals that die, do so way before they get this far.
6. Receiving and satisfying the Needs List. Items on this list include insurance requirements, entity documents, bank statements, appraisal reports, environmental reports, title commitment, etc.
7. CLOSING. This is normally a pretty anti climatic step in the process but of course is the whole point.
That’s it. The SBA loan application process is very detailed but really no more extensive than any other commercial mortgage.
SBA Loan Forms
Here are the required SBA forms for both SBA 7a loans and SBA 504 loans:
- SBA Form – 912 Personal History
- SBA Form – 413 Personal Financial Statement
- SBA Form 4506
- SBA Loan Application – Each lender normally requires you to fill out their version, but this one is directly from the SBA.
Other needed items/documents to complete your loan package and to apply for an SBA loan:
- Resumes on all borrowers with 20% or more ownership
- 3 years of business tax returns and on all affiliates
- 3 years of personal tax returns on all borrowers with 20% or more ownership
- Personal Financial Statement on all borrowers with 20% or more ownership
- Business Debt Schedule
- A/R & A/P Ageing Statement
- Year to date profit & loss and balance sheet on the business
- Copy of the Purchase Agreement, if applicable
- Bank statements that show where the money is coming from for the down payment, if applicable
- Pictures of subject property, if applicable
Hope this helps.