(917) 593-5013
Almost all for-profit businesses located in the United States can apply for an SBA loan.
As long as the business is (1) 51%+ owned by either a US citizen or Lawful Permanent Resident, (2) determined to be small under the SBA guidelines and (3) not deemed an ineligible business – they can apply!
Ineligible businesses include, but are not limited to, companies who: derive more than ⅓ of their revenue from gambling, are involved in live performances or sell products of a sexual nature, engaged in lending, landlords, life insurance companies, etc. For a full list, check out the SBA’s site.
It is, however, important to note that a business that is engaged in any federally illegal activities and/or products is not eligible. That includes anything related to marijuana – even if your state allows it.
The types of businesses that can apply include:
- Sole proprietorships
- Partnerships
- Limited liability companies
- Corporations
- Franchises
If you are a small business owner looking for funding to grow your business, an SBA loan could be right for you. People may think SBA loans are difficult to obtain, but eligibility requirements are not very strict.
Whether the loan application will be approved is based on meeting the SBA’s eligibility criteria.
SBA Loan Eligibility
To be eligible for an SBA loan you must:
- Located in the US
- Operate for profit
- Small under the SBA size requirements
- Read more here: SBA Loan Eligibility
- Be creditworthy and demonstrate a reasonable ability to repay the loan
Criteria 1 through 3 are pretty straight forward, so let’s talk some more about #4.
Creditworthy
To determine an applicant’s creditworthiness, a lender will utilize the following:
- Personal credit report(s)
- Business credit reports
- Reports of liens, judgments, bankruptcy filings or pending litigation(s)
As long as you have a personal credit of over 700, not a lot of late payments or any liens, judgements, ongoing legal trouble, and have not filed for bankruptcy – this criterion is the easiest of the two.
If you are involved in any of the above and have a slightly lower credit score but can demonstrate a strong ability to repay the loan, give one of our experts a call, and we will help you assess if you still qualify.
Ability to repay
The essential question here is: Can the borrower afford to (1) pay all of its existing expenses and (2) the new SBA loan.
The repayment ability analysis is done through a debt service coverage ratio (DSCR): Net operating income divided by annual debt obligations/payments, inclusive of the new SBA loan payments.
The lender must look at your cash flow as a whole, business and personal – so it includes your personal living expenses and outside income.
The First Step to Apply for an SBA Loan
Business Funding Group (BFG) helps small businesses apply for and secure SBA loans for business expansions.
The first step to applying is determining what your needs and goals are and having an introductory call with one of our experts.
On that first call we will discuss your goals, your business and personal finances, your credit score and credit history, and help determine if you qualify.
Once a preliminary prequalification has been done over the phone, we will collect some basic information from you to confirm what we have discussed on the call. That info is:
- Business and personal tax returns
- Interim P&L and balance sheet
- Debt Schedule
- Personal Financial Statement
Give us a call today to get more details about the process!
Contact Us To Determine Your SBA Loan Eligibility
If you have additional questions on who can apply for an SBA loan, give BFG a call, and we will answer any questions you may have! BFG could help with the application process and make your application as strong as possible.
With decades of experience helping business owners get approved for loans, we can guide you through each step. Contact us today for a 10-15 minute no-obligation call to determine your eligibility!