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How to get a small business loan in 4 steps
SBA Small Business Loan
Small Business Loans
If you’re trying to start or grow a business, access to capital can unravel a world of opportunities for you. Whether you’re aiming to hire more employees or purchase inventory, a small business loan can help you achieve your entrepreneurial goals.
You may feel overwhelmed and even a bit anxious at the mention of qualifying for a business loan. But rest assured, the process is quite streamlined and predictable, especially if you’re working with an experienced community lender familiar with the ins and outs of SBA loans and other products.
When working with a small business lender, be sure to ask them upfront what the process is so you know what to expect. Here’s the typical loan process with CDC Small Business Finance:
Step 1: Prequalify for a small business loan
- Provide your financials: Expect to share your personal and financial information with your loan officer. This includes your credit score and history, financial statements and tax returns. If you’re a startup, you’ll need to provide a business plan and projections. Your loan officer will serve as your main advocate. They will ensure you’re only paired with a loan that’s right for you and your business needs.
- More on financials: Not sure about your credit score or how to create a business plan or projections? Not to worry. You can access a broad range of free resources that can help you get loan ready. They include SCORE and small business development centers, or SBDCs, which are funded by your taxpayer dollars. For more on credit scores, check out our guide here.
- Get a reply within 3 business days: We know time is of the essence when you’re running a business or trying to get one off the ground. After your file is reviewed, you will get a prequalification decision or request for follow-up items within three business days.
- It’s a team effort: While your loan officer will be your main point of contact, you will also hear from others who will be working on your file. If you’ve been prequalified for small business financing, then you will also interact with a relationship manager and loan-file manager. More on that soon.
Related: What do I need for a small business loan?
Step 2: Get your business loan approved
- Reviewing your loan request: You’ve now moved on to the underwriting of your loan! This is simply the review process that leads to the decision of whether your loan request is approved or not. At this stage, expect to hear from a relationship manager. This is an expert who coordinates the underwriting of your loan.
- Getting to you know better: After you’ve submitted your documents, you’ll likely get follow-up questions from the relationship manager. This is a completely normal and crucial part of the process. Why? To ensure your loan team fully understands your business and its needs, which increases your chances of hearing, “you’re approved” at the end of the process.
- Approving your loan request: Your request for financing is then submitted for review and approval. Hang tight. After requested documents are received, you’ll likely have to wait four weeks for a decision. Feel free to contact us with questions as we wait for a final decision.
Related: How To Fix Your Credit Score Yourself To Boost Odds Of Getting Business Loan
Step 3: Get your business loan funded
- You’re funded! What now?: You’re almost at the finish line. At this point, a loan file manager will guide you through the last few steps before you receive your financing. This individual will work with you to collect required documents. They will include insurance, an escrow account, licenses, among other paperwork.
- Pro tip to speed things up: Get those docs in as quickly as you can. And work closely with any third parties such as landlords or contractors to ensure everyone is on the same timeline. Tenant improvements, for instance, can extend the funding process.
- Lastly…Sign your closing documents. Congratulations!
Step 4: Post-funding, know you’re in good hands
- Let’s stay in touch: Unlike traditional lenders, CDC Small Business Finance sticks with you during and after your funding. How? For one, once you’re funded, you’ll automatically receive The Source, a B2B e-newsletter we offer exclusively to our clients. This weekly compilation includes the latest business trends and tips, and borrower success stories.
- Get free business advising: We have an in-house team of business coaches available to you after you’re funded. At no cost to you, they can help guide you through being a business owner. The team offers everything from balance-sheet reviews to referrals to accountants, business attorneys and other professionals who can support you. We provide this service because we want to see you grow and succeed post-funding.
Related: How free coaching with SBA loan paved the way for pizza maker’s growth
Are you ready to grow or launch your business and need a capital injection? CDC Small Business Finance, an award-winning lender and nonprofit, offers several affordable loan options that could meet your needs including SBA loans.
Tell our loan experts about your business, and they’ll work to match you with a financing plan that best suits you. Let’s talk! Reach us at loaninfo@cdcloans.com or (619) 243-8667.
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