📺 What to Know Before Applying for a SBA Loan

What to Know Before Applying for an SBA Loan

Receiving an SBA loan can be a game-changer for any small businesses. These government-backed loans provide some of the lowest interest rates and longest repayment terms available, making them highly sought after. However, getting approved for an SBA loan comes with its own set of requirements and considerations. Knowing these in advance can save you time and improve your chances of approval.

Here are the Top 4 Facts You Need to Know When Applying for an SBA Loan:

1. Time in Business

One of the key requirements for SBA loans is your business’s operational history. Generally, SBA lenders prefer businesses that have been established for at least two years and have filed at least two business tax returns. This history gives lenders confidence that your business is stable and has the potential to generate revenue consistently.

SBA lenders look at business tax returns, formation documents and other financial records to verify your business’s time in business. Make sure these documents are up-to-date and accurately reflect your financial status.

2. Personal Credit Score

Your personal credit score plays a crucial role in SBA loan approval. Most SBA loans require a minimum personal credit score of 650 (FICO V9), as your creditworthiness reflects your reliability as a borrower. Lenders view a score of 650 or higher as a sign of financial responsibility, which can boost your chances of approval.

Quick Tip: Apply at FastWaySBA.com for a free credit check. This will give you insight into where your credit stands without impacting your credit score!

3. SBSS Score

The SBSS (Small Business Scoring Service) score is unique to SBA loans. It combines business and personal credit data with historical loan performance metrics for businesses in similar industries. This score is designed to predict the likelihood of your business repaying the loan. Generally, a minimum SBSS score of 155 is required for SBA loans, but scores above 160 significantly improve your approval chances.

Get Your SBSS Score for Free! You can check your SBSS score for free at FastWaySBA.com, giving you valuable insight before you start the application process.

4. Business Profitability Isn’t Always Required

One common misconception about SBA loans is that your business needs to be profitable to qualify. While profitability certainly helps, the SBA understands that many small businesses go through rough patches. You can still qualify for an SBA loan even if you’ve shown losses on your business tax returns. Lenders consider other factors, such as revenue trends, cash flow, and your overall business plan.

Don’t let a few down years hold you back! Even if you’re not currently profitable, there are SBA loan options available for businesses that show potential for growth and recovery.

Visit FastWaySBA.com to Check Your SBA Loan Eligibility Today!

If you’re curious about whether your business qualifies for an SBA loan, FastWay SBA offers a free pre-approval check. You can get insight into your potential loan options without committing or impacting your credit score—see if you qualify—no commitment required!