Small Business Loan Applications


Small business loan applications are available through many lending institutions who issue financing to cover all that a small company needs to prosper and grow. Most of these are based on programs that the SBA has initiated and confirmed with a secure guarantee. No matter what a private lender calls the financing, it is probably based on one of these three programs: Basic 7(a) Loan Guaranty, a Certified Development Company (CDC)–504 Program, and a Microloan, a 7(m) Loan Program. They even offer prequalification so that requests for $250,000 or less can be analyzed and sanctioned by the SBA based on financial ratios, credit and company history, and terms. The small business loan application information is then reviewed and processed by SBA district offices who work directly with business owners.
The Basic 7 is the most flexible, providing money for working capital, machinery or equipment, furniture, fixtures, land, building (renovation or new construction), leasehold improvements, and sometimes debt refinancing. Commercial lending institutions will accept a small business loan application for start-up and existing businesses for loans maturing between 10-25 years, but it is entirely up to them. All requests will include repayment considerations, management capability and issues regarding good character, collateral, and owner equity contributions. CDC financing provides fixed rate financing for small companies that want to expand or modernize. Small business loan applications for CDC loans needs to come hand in hand with multiple liens and 10 percent equity from the owner who is applying. Microloans are short term financing for up to $35,000 from the SBA to a lender to pass on to owners using an application. This is an ideal choice for smaller companies and not-for-profit child care centers.

The small business loan application focuses on two types of funding: equity and debt financing. Companies with low equity or a ratio of more debt than equity should increase ownership capital before beginning the application process as required information about non-professional investors like your mother (or friends, relatives, employees, and industry investors) or, as in most cases, venture capitalists whose wealth better guarantees the success of application will be needed. All information should be well-researched to demonstrate sound business management, without which most companies fail. ‘Give instruction to a wise man and he will be yet wiser: teach a just man and he will increase in learning.” (Proverbs 9:9) Having done so, the information will help provide adequate and timely financing. Small business loan applications are designed to help secure the right type of financing, the exact amount of money needed, and a clear estimation of how much it will cost a business to borrow.