If you’re planning to expand your business or upgrade your equipment with over $100,000, you’re likely considering the U.S. Small Business Administration (SBA) loan program. “These are ideal for transactions that are outside the scope of what traditional financing would do — it’s an avenue to access capital for small business,” says Rob Einstein, SBA Midwest Regional Sales Manager at U.S. Bank.

How to apply for an SBA loan

To be considered for an SBA loan, you need to apply for a conventional loan (under SBA guidelines) with one of its banking partners. The SBA provides a loan guarantee to its partner lenders, allowing them to offer greater flexibility in terms and rates.

While there are different SBA loan programs, all applications share a common set of paperwork that must be filed. This core set of SBA loan requirements includes the following:

Business structure and leadership

“The biggest step is understanding what you’re trying to do,” Einstein says, acknowledging the importance of a solid business plan. That includes knowing what investment you’ll make and how many dollars you’ll need.

To apply for an SBA loan, you’ll have to describe the purpose and structure of your business and provide a formal copy of your business plan, complete with projected financial statements. You’ll also need to describe your own business and management experience.

The lender will gather personal information, such as previous addresses, educational background and criminal records for you and your leadership team. “It’s important to make sure you have expertise in every segment of your business,” Einstein adds.

You should be prepared to provide your articles of incorporation, franchise agreements, licenses or registrations required to do business in your state and industry, and any applicable lease documents. If you have questions about this — or during any step of the application — meet with your business banking or SBA officer. “They’re there to be the trusted adviser to help through the process,” Einstein says.


Both your personal and business credit reports, income tax returns and bank statements will be reviewed. You’ll also need to provide business financial statements, including a profit and loss statement, cash flow and balance sheet, and a complete accounting of all business debt and creditors. Most lenders have a collateral requirement and will determine which of your assets can be used as collateral through your financial statements.

Another factor lenders carefully examine is your debt-to-worth ratio. High personal investment with minimal company debt makes you a more attractive credit risk because you have more financial skin in the game. “I always encourage applicants to protect their [personal credit score] and make sure it’s right, because that shows the history of how [the applicant] handles credit — small business is an extension of that ownership,” Einstein says.

Other financial measures of interest to the lender are the working capital you have on hand to manage the business, management of accounts receivable and payable, and how quickly you deliver your product or service after the order is placed. “Really understand what your strengths and weaknesses are as a borrower,” he advises. “If there’s a weakness there, make sure you address it.”

Purpose of the SBA loan

You’ll need to provide a detailed description of what you want to accomplish with your SBA loan. Thoroughly explain exactly how the money will be used to grow your business and, ultimately, improve productivity and profitability. “Don’t just look at the transaction itself but look at the whole life cycle of your business,” Einstein says. You need to make a strong case that you are a good risk who will repay the SBA-serviced loan in full.

Before you gather these loan documents, talk to your lender about your goals for your business. That way, you can get suggestions about the loan that best suits your needs and focus your efforts on applying for the right one. Armed in advance with key information, you’ll be well prepared to assemble a successful loan package.

SBA loan resources

For more information, talk to a business banker at U.S. Bank who can help you sharpen your cash management skills, or visit usbank.com/business.

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Editor’s note: This article was written by our partners at U.S. Bank.

Credit products are offered by U.S. Bank National Association and subject to normal credit approvals and program guidelines. Some restrictions and fees may apply. See a banker for details. Equal housing lender.

Deposit products offered by U.S. Bank National Association. Member FDIC.

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