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Wondering What a Sample SBA 7(a) Loan Proposal Looks Like?
If you're a hands-on learner (and the type who likes to be insanely prepared), you likely want to know what an SBA loan proposal might look like before you jump into the arduous process of applying for one. That's what we're here for! In our sample loan proposal, see a filled-out version of a real S
Start Your Application and Unlock the Power of Choice$5.6M offered by a Bank$1.2M offered by a Bank$2M offered by an Agency$1.4M offered by a Credit UnionClick Here to Get Quotes!If you're a hands-on learner (and the type who likes to be insanely prepared), you likely want to know what an SBA 7(a) loan proposal might look like before you jump into the arduous process of applying for one. That's what we're here for!
In our sample loan proposal, see a filled-out version of a real SBA 7(a) loan application, which includes:
Applicant and business information
Business history
Operational information (vendors, marketing, risks, etc.)
Financial information
Legal information
Project-specific information
What are the requirements for an SBA 7(a) loan proposal?
The requirements for an SBA 7(a) loan proposal include providing personal financial statements from all principals who have invested 20% or more in the business, and submitting personal tax records if required. Check this Loan Proposal to see what a sample SBA Loan Proposal Looks Like.
What documents are needed to apply for an SBA 7(a) loan?
To apply for an SBA 7(a) loan, you will need to provide the following documents:
- SBA Form 1919 (borrower information form)
- SBA Form 912 (statement of personal history)
- SBA Form 413 (personal financial statement)
- Financial statements, including a balance sheet, profit and loss, and income projection
- Agreement to purchase the business
- Letter of intent to buy the business
- Business tax returns for the past three years
- Any outstanding business debt
- Long-term business contracts
- Documentation of business assets
- Business lease agreement
- Incorporation documents and/or business license
- Business plan
In addition, the SBA will usually order an independent business appraisal to give lenders an idea of what the true value of the business is.
The SBA allows applicants to get help (for example, from a lawyer or a translator) filling out the application paperwork, but your lender will be required to submit information about who gave you help to the SBA, so you’ll need to document who this person is as well.
What are the advantages of an SBA 7(a) loan?
The advantages of an SBA 7(a) loan include:
- Highly competitive, low interest rates
- Long loan terms, up to 25 years
- Fixed and variable-rate options are available
- A variety of businesses are eligible
- Low down payments, typically around 10-20%
- Variety of loan options, including SBA 7(a) express loans, SBA 7(a) CAPLines
- Most SBA loans, including 7(a) loans are fully amortizing, meaning borrowers don’t have to worry about balloon payments
What are the eligibility requirements for an SBA 7(a) loan?
The eligibility requirements for an SBA 7(a) loan include:
- The business must meet the SBA's size standards for its particular industry.
- The business must have fewer than 500 employees and less than $7.5 million in revenue each year for the previous three years.
- The business must physically be based in the U.S. and operate within the U.S. and its territories.
- The business must operate for profit.
- Business owners must first have used other sources of financing, including personal funds, in order to qualify.
- Businesses must not be involved in lending, real estate, or speculation.
- Your business must operate for profit. Nonprofits and not-for-profit businesses are not eligible.
- You must also have some equity in the business — this could mean you already have a profitable business, or you could use your own personal equity as collateral.
- If you have any alternative financial resources, you must have used them first. For example, if you have a personal savings account or are able to get a personal loan, then you must first pursue those options before applying for an SBA 7(a) loan.
- The business owner cannot be on parole.
- You must be doing business in the U.S. or its territories.
What is the maximum amount of an SBA 7(a) loan?
The maximum amount of an SBA 7(a) loan is $5 million. If you borrow the maximum, the SBA will be funding $3,750,000 of the loan and your private lender will cover the rest.
For smaller loans, it might be a good idea to check out one of the SBA's other loan programs, like the 7(a) Small Loan or the Express Loan. Alternately, if you need more than the max amount of $5 million, the SBA 504 program or another loan is a better fit.
Sources:
Check out our sample business loan proposal below and get a head start on securing the funding you need to grow your business.
View the Sample SBA Loan Proposal