The Small Business Administration gathered to honor Utah’s SBA lenders on Thursday, Jan. 23 for their outstanding participation in the SBA’s loan programs. SBA loans are an increasingly viable option for small business owners seeking capital at any stage of business.
The Utah honorees included Large Zions Bank, Medium Celtic Bank, Small Rock Canyon Bank, Medium Bank of American Fork, Small Brighton Bank, Zions Bank and Central Bank, which also received the Blaine Andrus Memorial Award for its community efforts and diverse small business lending programs. The Utah District Office alone granted $407.8 million in loans to small businesses in 2013.
The SBA’s marquee loan programs are the 7(a) loan program and the CDC/504 loan program. The 7(a) loan program provides SBA-guaranteed loans to eligible small businesses. The 504 loan program has eligibility requirements similar to the 7(a) program, but specializes in financing for fixed assets, like equipment and real estate.
To qualify for either of these loan programs, a business must be considered small by the SBA’s size standards, operate for profit in the United States or its territories, and meet other requirements listed on the SBA’s web site. Even though these programs are SBA-guaranteed, small business owners are guaranteed acceptance to these loans. An SBA-guaranteed loan means that the SBA backs the loan up to a certain amount to reduce the lender’s risk, incentivizing lenders to give out these loans. So before approaching an SBA lender—like those honored in Utah—small business owners should properly prepare their business information, business plan and payment history.
When preparing for your appointment with an SBA lender, you should be equipped to demonstrate a well-defined business plan with objectives, cash flow information, and an exit strategy, but also prepared to show the value of your business. The SBA takes special interest in business owners with valuable objectives. For example, Jill Blankenship, CEO and founder of Frontline Call Center in the San Juan Islands off the coast of Washington, won Washington’s small business of the year award from the SBA after receiving a loan from the SBA years earlier. She started the company to provide year-round employment for the people that live on the San Juan Islands.
To comply with the SBA, all participating lenders will require the same documentation:
- An SBA loan application, SBA Form 4
- A Personal History and a personal financial statement. SBA Forms 912 & 414
- Business Financial Statements (P&L and projected)
- Ownership and affiliations
- Business certifications/licenses
- Loan Application History
- Personal & Business Income Tax Returns
- Résumés for the key business executives
- A Business History
- A copy of the business’s lease
Additional information may be required if you are purchasing an existing business, according to the SBA’s web site. It is important to make a nice, organized first impression with your SBA loan officer, so make sure you have all of the above paperwork.
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