Tips for Applying for an SBA Loan
Nick Meyer

When opening your local business, you are likely to consider taking out a loan. But before you apply, it's best to consider if an SBA (Small Business Administration) loan is truly right for your needs. Here's a few tips to make sure you get the most from your loan if you decide it fits your restaurant:

The bank needs to verify your financials
Step one for the bank will be to check over your finances. There is nothing to worry about at this stage, just keep in mind that the bank is looking to avoid risky transactions. Your financial records will be one of the most important indicators as to whether or not the bank will issue the loan.
Prove that you're an experienced industry professional
The SBA Program is built for small business owners with extensive experience in their relevant industry. If you are not as experienced, it's best to take the time to become more familiar with your trade. The bank will feel more comfortable if they know they can rely on you.
Good credit history is essential
650 or above is generally the credit score you should be shooting for when applying. Importantly, if you have a spouse, their credit score will be referenced as well. Be sure to check your credit report before beginning the process and be prepared to answer any questions the bank may have for you.
Don't apply without money in the bank
Don't forget that the bank is looking to safeguard their investment. Good credit is a must, but the bank will also be looking for 20-30% of the loan amount to be currently held in cash when applying. Larger loans can see that percentage climb up to 50%. Keep in mind, you can get a larger loan if you already have more on hand.
Write a business plan that will blow them away
Ensure you're truly ready to apply, even if drafting a full business plan will take a considerable amount of time. It's better to to make sure your concept truly stands out than it is to throw together something quickly for the purposes of a convenient submission.
Tell the truth/Don't cut corners
Applying for a loan is a lengthy process with what can seem to be a mountain of paperwork. Don't take shortcuts by simply ticking all the boxes. The bank will run a full background check and is trained to detect if you've been untruthful on your application. If you have a minor offence or misdemeanour in your past, you will be given the opportunity to explain during the interview.
Look at all of your bank options
Remember that the SBA oversees your loan, while the bank supplies the actual capital. Do make sure to research before reaching out to avoid approaching a bank that won't sponsor a loan in your industry. Your local SBA Office can provide you with information for banks that issue loans for your relevant industry.
Consider using gift card financing instead of taking out a loan
Loans are costly and take a long time to pay back. In contrast, gift card financing lets you fund your small business at a 0% rate. Apply for financing from inKind and we'll take credit as soon as the order has been processed. We'll then sell that credit as high value gift cards, providing you with a cheaper means of financing while creating a new channel of customer exposure at the same time.
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