Getting a small business loan may be the next natural step in financing the growth of your business — whether that includes expansion, inventory, or other options. To get from point “A” to point “B”, there are several steps that must be taken to ensure you obtain the best loan for your needs.
Here’s a look at the steps required in getting a small business loan, with help from Bank of Central Florida’s Executive Vice President and SBA Executive, Kevin Riffey.
1. Determine Your Needs
Before you begin searching for a loan, ask yourself some questions to clearly define what you need from the loan. Questions such as: How much money do you need? What will it be used for? (Add one more question here) Knowing these details will help you determine which type of loan and lender is right for you.
According to Kevin, almost all small businesses would be a good fit for SBA loans and would benefit from an SBA loan. In particular, borrowers looking for a loan with longer terms, a lower down payment and more flexibility in underwriting should consider the SBA loan option.
2. Research Potential Lenders
Once you know your needs, it is time to start researching potential lenders. Look into banks, credit unions, online lenders, and SBA-backed loans to see which one best fits your unique requirements. Be sure to look into all options available to find the perfect fit for your small business.
Bank of Central Florida currently offers both 7a and 504 loans. The 7a Loan Program is backed by the Small Business Administration (SBA) and the funds come from private lenders. A 7a loan can be used for a wide range of business needs, including working capital, machinery, equipment or purchasing real estate or buildings. The amount of money one can receive is up to $5 million.
The 504 Loan program is also known as a Certified Development Company (CDC) loan and comes from private sector lenders with a portion that’s guaranteed by the SBA. With this type of loan, you are allowed to purchase assets such as land and buildings, expand your existing facilities, refinance debt that was used to create jobs or increase energy efficiency measures. The maximum amount one can receive through this program is half of what's available through 7a: up to $2 million.
3. Prepare Your Application Package
Once you have determined which lender and type of loan is right for you, it’s time to prepare an application package including all necessary documents such as: tax returns, financial statements and personal information forms. Having this ready ahead of time will help speed up the process when actually submitting your application.
Bank of Central Florida's loan specialists understand the needs of small businesses and will help you find the best fit for your budget. Get the funding you need today with an SBA loan from Bank of Central Florida by asking questions during every step of the process to ensure answers.
4. Submit Your Application Package
Now that everything is ready, it’s time to submit your application package together with any additional documents required by the lender. Be sure to check back frequently in case there are any updates or requests for additional information during the processing period.
5. Wait for Approval
Approval times vary depending on the particular lender. An average timeframe would be between 7 and 10 days after submission of all necessary documents and information requested from the lender upon initial application submission.
At Bank of Central Florida, Relationship Managers will review financial statements, verify credit history and assess cash flow projections to ensure that applicants meet SBA qualifications. With their expertise in banking regulations and industry standards, BOCF is able to inform applicants of potential risks and advantages associated with these types of loans. This guidance at each step of the application process helps make sure that businesses get access to the right funding opportunities.
Interested to learn more about an SBA loan? Contact one of our local SBA Development Officers in Central Florida.