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Help with sba loans?
I want to apply for a micro loan through the SBA's Micro-Loan program. Has anyone applied for this program before, if so, what tips do you recommend for someone looking to secure a loan of this sort?
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1 Answer
Lenders look for the fundamentals of credit to be satisfied no matter how small the loan. They will look at/for:
1. Your personal credit score which should be 680 or better on the FICO scale.
2. The source of cash flow for repayment. After all expenses, this should be greater than 1.25 times the proposed Principal & Interest you are seeking. A business savvy borrower should be able to tell the lender what their expected cash flow coverage will be.
3. Management experience in the industry - either you have it or you don't
4. Collateral - whether its equity in real estate, stock, or other - what is it? Have this clearly presented on an accurate Personal Financial Statement.
5. A business plan. Even for a small loan the lender wants to see that you are on your game and have a defendable plan with reasonable assumptions.
Finally, not all lenders are the same. Find a lender that specifically works wit the micro-loan program. It's easy if you check the local resources on the SBA District website located in your area.
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