The Ultimate Guide to SBA 7(a) Loans

Many small business owners need funding to help spur growth, buy inventory, or obtain working capital. One option to explore is  SBA7(a) Loans. SBA 7(a) Loans range from $30,000 to $5 million. The loan program is offered by the U.S. Small Business Administration and provides an affordable and accessible financing solution for small businesses, including borrowers who may not qualify under traditional guidelines.

 Once you've decided that this type of loan is right for you, the first step is navigating the SBA7(a) Loan application process. Preparation is key. Knowing the answers to the questions below, ahead of time, could give you the edge you need to boost your chances of approval:

 Is a SBA 7(a) Loan What Your Business Needs?

 The SBA 7(a) Loan is the most popular of the SBA's loan programs. Within the 7(a) program are multiple types of loans, each offering different funding amounts, purposes, and turnaround times. The SBA works with pre-approved and preferred lenders, such as City National Bank of Florida, who help facilitate the SBA 7(a) Loan application process and provide funding.

To be eligible for an SBA 7(a) Loan, you need to meet a few requirements set by both the SBA and your lender, including:

• You've been in business for     at least two years.
• The business is for-profit.
• Your business is cashflow     positive.
• You have a net worth of less     than $15 million.
• You have an established     credit score with no tax liens.

 What Can You Use an SBA 7(a) Loan for?

The SBA has specific guidelines for using the SBA 7(a) funds as part of the lending process. Small business owners can use the financing for:

• Improving working capital
• Purchasing real estate,     inventory, and equipment
• Hiring new employees
• Refinancing existing debt
• Covering marketing expenses

For many small business owners, funding can help cover a variety of operational expenses by providing the needed capital to help keep your business going.

What Does the SBA 7(a) Application Process Look Like and How Can I Apply?

One advantage of SBA loans lies in their quick application processing. Instead of waiting weeks or months to hear back, you can secure funding within a mere five to ten business days once your application is approved. To kick off the process, contact a specialist from City National Bank of Florida (CNB). The CNB team will guide you through the entire process, offering support from initiation to completion. Easily connect with a specialist by clicking here. Upon completing the required information and detailing your requirements, a specialist will promptly reach out to you. For loans amounting up to $500,000, your designated CNB specialist will provide a link to an online application portal, streamlining the application process.

You start the pre-qualification step by providing basic information about your business, its owners, and financing needs. Then, if you pre-qualify, review your requested amount and the loan terms, including length, fees, and interest rate.

From there, you can proceed with the SBA 7(a) Loan application process. Once your small business administration loan application is complete, your lender will send the package to the SBA for a final decision. If your request is approved, you'll receive the funding, minus fees, from your lender.

For loans up to $5 million, your specialist will reach out to guide you through the process and offer insights into the best practices for approaching the application procedure.

How can I Prepare for the SBA(7a) Loan Process?

 Now that you have a better understanding of the SBA 7(a) Loan application process, you'll want to put yourself in the best position to succeed—and that means having everything ready to go. Read on for the information you need to have ready and what documents to pull together beforehand:

Review your credit score

A good credit score can help you qualify for more attractive loan terms or get a loan if you are anew business owner.

Work on improving your score by reducing the debt on your credit cards and paying all your bills on time.

Understand the eligibility qualifications

Before starting the process, review the SBA's eligibility requirements and those of your lender. You don't want to begin only to discover you don't qualify.

Know how you plan to use the loan

Both lenders and the SBA like seeing specific information on applications. It helps them better understand your business, how much money you'll need, and how you'll use the funds.

Review your needs and develop a detailed plan on how you determined the amount you need and your strategies for using those funds.

Have your documents ready

SBA loans require paperwork. Your lender won't be able to submit your application to the SBA without this information. So having it ready beforehand helps streamline the approval process. Here's what you'll need.

• Personal     information:     You'll need a government-issued photo ID and your Social Security number.
• Business     financials:     These documents should include your profit and loss statement, balance     sheet, projected financial statements, business bank statements, and     business debts.
• Business     entity information:     This information includes ownership details, your business license or     certificate, tax returns, a resume, your loan application history, an     overview of your business, and business lease documentation (if you have a  lease).

To read about more detailed information about the program eligibility and learning how to navigate the online platform (for loans up to $500k), please download our SBA 7(a) User Guide.

Download Now

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Getting to Know Your Lender

 City National Bank of Florida is here to help small businesses succeed, and to be your lender. One of the benefits of working with a trusted, community-focused banking partner is the proximity to where you live and work.

 With affordable rates, longer repayment terms, City National Bank of Florida's SBA 7(a) Loan program can help you get the financing you need to grow your business and maintain cash flow while saving time with the support of a dedicated relationship manager.

If you are an existing City National Bank of Florida customer or want to explore your financing options and haven't worked with us before, we're here to learn more about your business and help it to succeed.

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Ready to move forward? Contact a City National Bank of Florida specialist today.

Sources: 

www.sba.gov