What is SBA Lending And Is It Right for You?

The Small Business Administration (SBA) is a federally funded program that has several financial assistance programs that help small businesses receive debt financing, surety bonds, and equity financing.  For simplicity, let’s focus on debt financing.

Are you a business that is needing financing but:
  • Have been told you are too risky?
  • Start-up financing isn’t an option?
  • There is not enough collateral?
  • The required down payment is too much?

SBA financing could be your solution!

SBA will not directly make your loan, but rather partner with Lenders (financial institutions) and micro lending partners (WBD Advantage Fund, Wisconsin Women’s Business Initiative Corporation, etc) who can help you.

State Bank of Cross Plains happens to be a Preferred Lender with SBA, meaning your loan application process can be shortened to roughly six weeks versus much longer with a non-Preferred Lender.

If you are interested in applying for an SBA loan, make sure you have the following items in order:

  • Business Plan
  • Financial Projections with Assumptions – for at least the next three years; first year broken out month by month
  • Three years Business Taxes/Financials – if applicable
  • Personal Financial Statement – on SBA’s form
  • Three years Personal Taxes
  • Accepted Offer to Purchase/Purchase Contract

There are additional SBA documents that will need to be completed, but having the above items ready or completed will help make the process run smoothly.

If you are needing help putting together a Business Plan, there are several options in the Madison, WI area that help small businesses for free or a nominal fee.  Some of these organizations are:

Small Business Development Center (SBDC) – (800) 940-7232 or (608) 262-3909; go.wisc.edu/sbdc
Wisconsin Women’s Business Initiative Corporation (WWBIC) – (608) 257-5450; info@wwbic.com; 2300 S. Park Street, Ste 103, Madison, WI 53713
SCORE Madison – (608) 441-2820; score.org; 505 S Rosa Rd #37, Madison, WI 53719

All of these organizations have been around for several years, and are extremely helpful for any small business.

Making sure you apply for the correct type of SBA loan and working through the process will be something your Lender will help you with, explaining pros and cons.  Make sure to pick a great financial partner.   and help make your big small business dreams come true!

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