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The SBA7a Loan and Its Documentary Requirements

April 24, 2012 | Comments: 0 | Views: 148

For borrowers with weak credit record the SBA7a loan has become a saving grace. It offers a lot of advantages that makes it easier for borrowers as well as giving security to the lenders.

The Small Business Administration is a United States government agency that offers the SBA7a loan program. It should be made clear that the SBA does not provide the loan, instead, it guarantees or insures the lender that payment will be made even when the borrower could no longer make the necessary payments for the debt they incurred.

The SBA took steps in making the qualifications for a 7a loan more accommodating compared with other categories of loan. Nonetheless, lenders who are eligible to grant 7a loans require from the borrower the submission of a variety of documents to be able to start processing a loan application. These documents will be reviewed and processed carefully to ensure the applicant is suitable to the loan program. Careful preparation of the required documents is advised, as another chance of getting a presentation of the preliminary loan proposal may not be possible once you have been denied in the first application.

One of the paper works required for the application of an SBA7a loan is the compliance of a business profile document. This is a written narrative about the nature of the business that an applicant conducts. Several important items must be integrated in this document including the brief history of the business, stating the duration as well as ownership, especially if the applicant is not the first registered proprietor of the company that will be the recipient of the loan. Other information expected to be present in the document consists of the information about the product or service being marketed, customers, number of workers, competition, location, yearly income, dealers, and even future plans for the company. The date when the above information was given must also be present in the document.

Legal documents about the business will also be demanded from the applicant. These are governmental and non-governmental licenses, contracts, partnership agreements, articles of incorporation, letters of intent, letters of reference, franchise agreement and purchase agreement among others.

An applicant will be filling a form referred to as the SBA Form 4, which will state how the loan being applied for will be used. The amount of loan and the type should also be included in this form. To complement the SBA form a loan repayment document should also be attached.

Apply for an SBA7a loan now. Find a bank that can help get SBA7a loans approved easily.

Source: EzineArticles
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