How to apply for an SBA business loan

If you’re a budding entrepreneur or are already in business and looking to grow, consider applying for a Small Business Administration (SBA) loan. Whether you want to purchase assets for your business, refinance existing debt or simply expand, you can access an SBA loan through Comerica.

Finding an SBA preferred lender

You might have heard about SBA loans while not knowing exactly how your business can get one. Congress created them in 1953 to help small businesses access financing at reasonable terms.

At Comerica, we’ll work with you to evaluate your needs and find an SBA loan for your situation. We’re an established SBA preferred lender so we have plenty of experience to help your business succeed and grow.

Determine whether your business is eligible

So how do you know if your business is able to access an SBA loan? Although it may seem daunting, obtaining a business loan is not always as taxing as you might think.

Your bank will determine if you meet their criteria, but there are a few SBA-specific conditions. For the SBA’s most common loan program (general small business loans), you’ll have to:

  • Have reasonable equity invested and operate as a for-profit business.
  • Be defined as ‘small’ by the SBA.
  • Plan to do (or are already doing) business in the US.
  • Show a need for the loan and use the funds soundly.
  • Have no delinquent debt obligations to the US government.

Other loan programs the SBA offers through its preferred lenders may have different criteria. Take a look at the SBA’s loan program options.

Find out your credit rating

If this is the first time you’re applying for a business loan, the bank will probably take your personal credit rating into account. Find out how your credit rating stacks up with Equifax.

Develop a business plan

A strong, clear business plan is a vital part of the application process. Your bank will want to understand your:

  • Business and its strategy.
  • Reasons for applying for the loan.
  • Planned goals and objectives.
  • Proposed staff and their roles.

They’ll also want to know the amount of money you plan to borrow. Use Comerica's free online business plan tool to make a start on your plan.

Outline how you intend to use the funds

Provide a detailed breakdown of exactly how you intend to spend the loan proceeds, and what your repayment strategy will be. You’ll need to demonstrate how you’re going to pay back the loan if your application is to be successful.

Lay out your contribution

Your bank will be interested to know how you’re contributing to your business before they grant you an SBA loan. Inform them of your:

  • Assets and liabilities.
  • Experience in business.
  • Skills and abilities.
  • Income and living expenses – you’ll need to show how much you’ll be taking out of your business to fund your personal commitments.

Make sure you know your business

You’ll be asked specific questions about your business and business plan. Ensure you have that information readily available. The more information you can provide, the better positioned your bank will be to assist you.

Collect the information you’ll need

Regardless of whether you’re preparing documents for an SBA loan or another small business loan from your bank, you’ll probably have to submit most of the following items:

  • Business plan – as mentioned above, all loan programs need a thorough business plan that should include projected financial statements.
  • Personal background information – such as your educational and business background, criminal record, and previous addresses.
  • Resumes – showing evidence of management or business experience, especially if you’re starting a new business.
  • Bank statements – one year of personal and business bank statements is common.
  • Income tax returns – personal and business returns for the last three years.
  • Credit reports – a personal credit report will be part of your application process, as will a business credit report if you’re already in business.
  • Collateral requirements – you may need to offer a collateral document to secure the loan.
  • Legal documents – your bank might also ask for some legal documents like a business license and registration, copies of contracts with any third parties, and commercial leases, depending on what’s required.

An SBA loan with Comerica

At Comerica, we value small businesses and want to help them get ahead. We have the right solutions for you and your business.

Get in touch with us to understand what we look for when considering a business loan. It will go a long way to helping your application be successful.

Next steps

  • Start gathering all the documentation you’ll need to prepare your business plan. Find out more about Comerica's SBA loans.
  • Discuss your requirements with your accountant. They can help with your application by providing advice and support.
  • Find a Small Business Banking Contact for more information about what you’ll need and how to go about applying.

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