In need of a loan to help you launch your own business? The Small Business Association’s (SBA) loan program can be a great low-cost solution. This worksheet will help you figure out eligibility rules, how to prepare—and what to expect.
In need of a loan to help you launch your own business? The Small Business Association’s (SBA) loan program can be a great low-cost solution. SBA loans are administered through your local bank. To secure one successfully, you’ll need to do your homework—and have a solid Business Plan in place.
This worksheet will help you figure out eligibility rules, how to prepare—and what to expect:
Do you meet the basic eligibility requirements for an SBA loan?
Your business must be based in the U.S.
It must be a for-profit business.
Your business ownership structure must be at least 51% owned by a U.S. citizen or permanent resident of the U.S.
Your business must sell a service or product.
What documents you’ll need to share
Your personal income tax returns for the past two years—along with those for any other businesses you may own
If you currently own a business, your company’s bank statements for the prior six months
A formal, written Business Plan, including both short-term and long-term expense and revenue projections. Your Business Plan should include:
An analysis of your target market
How your business will be structured and who will hold key roles
A detailed description of your business’ services and/or products
Your competitive advantages
Your strategies for attracting and retaining customers
Is your business incorporated or structured as an LLC or partnership? If so, you’ll need to provide proof of ownership, and demonstrate registration in the state (or states) where you’ll conduct business.
Questions you should be prepared to answer
Successful business launches typically have much in common—including careful planning and realistic expectations. You’ll be asked questions that explore how well you’ve researched all aspects of your new venture.
Who will be your customers—and what kind of geographic reach are you aiming for? Another way of looking at this: Who is your target market?
How will your product or service benefit your customers? It’s important to consider this from as many aspects as possible, including customer experience, value and price, the location of your business if you have one, and how you’ll meet customer-specific needs.
What trends are currently impacting your industry?
How will you reach your customers? Your strategies for sales and marketing will be key to building a successful business.
Are you prepared to provide collateral for your business loan?
What is the legal ownership structure of your business?
What costs do you anticipate: As your start-up costs? For the first six months? The first year? Think about this in terms of both one-time expenses and monthly expenses. Spending time getting this right can help you avoid costly surprises later on.
What will be your other sources of start-up capital? Are you planning to take on any investors or partners in the business? Will family members be helping out? Are you planning to draw on your own personal savings?
Special considerations that may help you get a leg up—along with some potential stumbling blocks
The SBA will want to know as much about you and your business’ outlook as possible. For example, you should expect both your personal credit history and your credit score to be reviewed. As part of your application, you’ll be asked questions about your legal history, including whether you’ve ever filed for bankruptcy or are involved in any pending legal action.
You may be able to take advantage of targeted support and resources based on your circumstances, industry, or business location. Supportive business resources and programs are available to:
Socially and economically disadvantaged businesses
Business serving rural areas
Be sure to discuss any factors that apply to you with your loan officer.
Ready to get your application started? We’d love to hear from you.
Ultimately, securing a SBA start-up loan will depend on a wide range of factors. The more you can plan ahead and educate yourself about how to position your business for success, the better.
Questions? Fifth Third is here to help guide you through the process.
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