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Janet Gershen-Siegel
August 3, 2018


Need to Get a SBA Loan Credit Suite

Here are 10 Things You’ll Need to Get a SBA Loan

Do you know the 10 things you’ll need to get a SBA loan? We break down the details. We’ve got your SBA Loan Checklist right here. For businesses with some profitability and time in business, SBA loans are a very real possibility. Your competitions may also need to get a SBA loan, so it’s better if you know before THEY do.

A Little Background on SBA LoansSBA Loan Checklist Credit Suite

The Small Business Administration does not actually loan money. Instead, they set loan guidelines. Because the SBA guarantees these loans, the rates are more favorable. The terms are more flexible. But the SBA says real estate investing, for example, is too high risk for them.

Not every company can qualify for an SBA loan. But for those that are able to, the SBA can come to the rescue and get you funding. But be aware – there is a lot of paperwork.

The Small Business Administration has various CAPLines loan programs and SBA Express. The SBA’s lending partners will actually make the loans. In addition, the SBA offers research grants if your company engages in scientific research and development.

Requirements differ a bit between the various loan programs. However, these requirements are fairly universal.

Information on Credit Suite's Business Credit and Finance Guide. Get to know our business credit and finance guide, with new ways to finance your business without emptying your wallet. Check out our professional research.

10. A FICO SBSS of 140 or better (ideally, over 160)

The SBA uses the FICO SBSS (Small Business Scoring Service) as a gauge of creditworthiness. The scores reflect the likelihood of an applicant paying their bills timely. These scores range from 0 to 300. The higher scores mean lower risk.

Therefore, the higher the score you have, the better. Personal and business credit history plus financial data go into the total score calculation.

For SBA loans, you will not get an approval with a score under 140. However, they typically set a cutoff as high as 160. Below that, you will probably get a denial because of being too high a risk.

Chances are good that an SBA lender won’t even submit your application to SBA if your score does not meet the threshold.

9. Personal Credit Report

Similar to your FICO SBSS, the Small Business Administration will want to see your overall personal credit report. They want to dig beyond your numeric scores.

8. Business Credit Report

It should come as no great surprise that the SBA will want to take a close look at your business credit report as well. A PAYDEX of 80 or higher is good. Note: the range is 1 – 100.

7. Business Plan

Every type of SBA loan is going to want a copy of your company’s business plan.

A business plan will need to start with an executive summary, and a description of your business. It should also have a market analysis designed to outline your opportunity and your competition. Also include data about your company’s management and operations. And make sure to include the management team’s experience, and your company’s marketing and sales strategy. Finally, include your business’s financial projections and statements.

You will need to demonstrate your business’s uniqueness and also outline your financial projections. What is your company’s potential? How do you see your hoped-for loan fulfilling that potential?


6. Business Size and Time in Business

The SBA is meant for small businesses, so they want to be sure your company has less than a certain number of employees or dollars in profit. As for time in business, the SBA generally wants to see companies with at least two years in business.

5. Balance Sheet

A balance sheet is a quick snapshot of your company’s financial health. It will provide some insight into how your business functions. A balance sheet gives specifics on what you have and what you owe. It also shows a lender how you will manage your assets and liabilities.

Your assets will be anything of value that is owed or due to your business. They are the sum of: your cash, accounts receivables, notes receivables, inventory, and your company’s fixed assets. These can be real estate, buildings, machinery, and other items.

Your liabilities are anything the business owes. This includes accounts payable, notes payable, accrued expenses, and long-term debt.

Information on Credit Suite's Business Credit and Finance Guide. Get to know our business credit and finance guide, with new ways to finance your business without emptying your wallet. Check out our professional research.

4. Collateral

Also, you will probably have to document the value of your collateral. The amount of collateral will vary. So if other aspects of your application are strong, you might not have to put up quite so much collateral.

Collateral can come in several forms. It might be equipment or even land that your company owns.

3. Profit & Loss Statement (AKA an Income Statement)

A P&L (Profit and Loss statement) is, according to Investopedia: 

“… [A] financial statement that summarizes the revenues, costs and expenses incurred during a specific period of time, usually a fiscal quarter or year. These records provide information about a company’s ability – or lack thereof – to generate profit by increasing revenue, reducing costs, or both. The P&L statement is also referred to as ‘statement of profit and loss’, ‘income statement,’ ‘statement of operations,’ ‘statement of financial results,’ and ‘income and expense statement.’”

See: https://www.investopedia.com/terms/p/plstatement.asp

A profit & loss statement shows your lender your small business’s revenues and its expenses. A P&L will provide a degree of insight into where your money is coming from and going to. This is something both you and your lender will want to be on top of.

A strong P&L can potentially convince your lender that your cash flow is good. It can show your cash flow is steady enough to weather business downturns and to cover any unexpected costs which might potentially arise.

Creating a P&L

The P&L (AKA the income statement), one of three quarterly and annual statements a company makes as to its financial health. The other two are:

  • The cash flow statement
  • The balance sheet

Numerous blank P&L forms are online to help. Here’s one: https://view.officeapps.live.com/op/view.aspx?src=https://businesscreditblogger.com/wp-content/uploads/2015/02/Profit-and-Loss-Statement-Worksheet.xls

The idea is to show changes in accounts. This is over a specific time frame. In that way, it’s similar to your cash flow statement. Contrast this with the balance sheet, which is more of a snapshot.

The Nitty Gritty of Writing a P&L

Here are specific instructions for creating a profit and loss statement.

Net Revenue

Start with Net Revenue (the “top line”). This is the money coming in from sales. Subtract the Cost of Goods Sold. “COGS” is the hard costs associated with producing your product or service. Those can be materials, equipment, etc.

Gross Margin

Your Gross Margin is what is left, before operating expenses. Subtract your Fixed Expenses. These are fixed regular expenses like insurance and rent.

Variable Expenses

Then subtract your Variable Expenses. These are changing expenses such as travel and marketing. This is your “Earnings Before Taxes” (EBT). It is what you have before taxes are taken out.

The Bottom Line (Net Income)

Now subtract your taxes. These are expenses you have got to pay. The amount which is left over is your Net Income (the “bottom line”). This will show if your company is profitable, losing money, or breaking even.

Information on Credit Suite's Business Credit and Finance Guide. Get to know our business credit and finance guide, with new ways to finance your business without emptying your wallet. Check out our professional research.

2. Business Debt Schedule

A business debt schedule is a listing of all the debts your business currently owes. This document will also break down debt by monthly payments. It will also determine your interest and payment dates.

Before you take on any additional debt, you and your lender will need to consider your business debt schedule closely. This is to make sure that taking out another loan will make sense for your business. They want you to be able to pay it back.

This document will keep you organized when it comes to your business’s finances. It will help to assure that you never miss a payment. Plus you can keep track of bookkeeping and forecasting. In addition, it will help to monitor your company’s financial health.

1. Various Legal Documents

So the SBA will want to see if you have any and all business licenses you need to operate. They will also be looking for Articles of Incorporation, if applicable. The SBA also wants to review all of your contracts with third parties. These are people such as clients or suppliers.

The SBA will want to go over any franchise agreements. They will also want to inspect any and all leases for commercial real estate or business equipment, too.


They also want to know the purpose of the loan. So what, exactly, do you want to use the money for? Be specific on your application. The Small Business Administration wants to help you. But they first need to know exactly where the money is going. And they want to know what you are going to do with it.

Takeaways for the 10 Things You’ll Need to Get a SBA Loan

The Small Business Administration has rather strict requirements. But getting everything you need, and lining all your ducks in a row, is not insurmountable. Being ready will help you get an SBA loan and also to minimize delays. Need to get a SBA loan? We can help!

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