The SBA loan program is a great way to get funding for your small business. Through SBA loans in Oklahoma, the Small Business Administration helps businesses get to the next step by providing loans and other financial assistance for various purposes, including purchasing real estate, creating jobs and making long-term equipment investments. The program offers several types of loans through both local for-profit and nonprofit financial institutions. We’ll give you the basic information on SBA loans and how you can apply for a loan for your Oklahoma business.
You’ve probably heard of SBA loans, but what exactly is an SBA loan?
SBA loans are government-backed financing options offered by the Small Business Administration of the United States government. These loans are available for small businesses, generally defined as any business that:
SBA loans offer lower rates and longer terms than conventional loans that are backed by private lenders. Some SBA loans also require no collateral, which can be a big benefit to some potential borrowers. These loans aim to support small businesses in the United States to secure the funding they need to start, operate and grow.
The federal agency also offers educational programs and counseling services with these loans to best support business owners in successfully operating and growing their businesses with the funds they receive.
There are three main types of SBA loans, and your local business lender can advise you on which option will be the best for you.
7(a) loans are the most common SBA financing option used by businesses in the United States. They can be used for various purposes, including working capital, refinancing debt and making expansions and improvements to your business.
These loans have fairly flexible terms, with a $5 million cap, however, your businesses’ specific income, credit and qualifications would determine the amount you’d be eligible to borrow.
SBA 504 loans are usually used for property purchases, improvements, and long-term equipment purchases. They cannot be used for working capital, refinancing debt, or purchasing investment real estate.
Most 504 loans offer a fixed interest rate and can have a cap of $5-5.5 million but will be offered based on the income, qualifications and specific needs of your business.
Funding for a 504 loan comes from three places, a percentage is funded by a local non-profit CDC (Certified Development Company), a percentage is funded by a local bank or credit union, and a percentage is funded by the small-business owner through a down payment.
Microloans from the SBA offer small businesses up to $50,000. The program is designed to help small businesses start up and expand. Microloans are also available for some non-profit childcare centers.
These loans can be used for various business needs, including rebuilding, re-opening and improving a small business. They can also be used for working capital, inventory, supplies and machinery. However, they can’t be used for refinancing existing debt or buying real estate.
You’ll need to submit several documents when applying for an SBA loan in Oklahoma. These may include:
These are some basic information requirements however additional information may be necessary for approval. Your local business lending partner can guide you through the application process.
Every lender has different requirements when applying for an SBA loan. Still, generally, they will ask for information like your credit score and history, your business’s current cash flow, available collateral, financial history and other factors that affect your business’s ability to repay the loan.
The SBA requires you to apply for a loan through a qualified lender. Banks specializing in small business support have lending officers who are experienced in working directly with the SBA to approve your loan.
If you work with a bank with whom you have an account, they will likely have some of your documentation on hand to make the process easier.
Smaller, local banks often have more time and interest in building long-term customer relationships. If you find that you’re having trouble applying through the bank you currently have a relationship with or you are not having a supportive experience, you are not obligated to apply through any particular lender. There are options available throughout Oklahoma for personalized banking services that prioritize the growth of small businesses.
Every SBA lender will need to know the details of your plan to use the funds that you’re applying for. It’s best to be prepared to clearly explain how the purchase or projects you’re funding will increase your business’s profitability.
Whether your business is a start-up or has been around for years, you’ll need to have a clear business plan. The plan should at least include your vision for the next three years, with a month-by-month plan for the current financial year.
Your business plan should include
You’ll need to provide the documentation that proves your creditworthiness and ability to pay back the loan through your personal and business financial history, credit scores, financial statements and realistic future projections. This will help the bank understand your current financial position, if the loan will be sufficient to help your business and if they can trust that they will be repaid.
When applying for an SBA Loan, you’ll need to provide documentation of your business certification with the State of Oklahoma or whatever state your business is operating in. You’ll also need to provide your EIN verification from the federal government and your operating documentation, including your business’s structure, information on all owners and other pertinent details about how your business is run.
It’s important that you provide accurate information so there are no problems with processing your application and you can get a clear and accurate answer on your eligibility.
We hope this guide has helped you learn more about the SBA loan program and how it can benefit your small business. If you’re ready to start the application process for an Oklahoma SBA Loan, First Pryority Bank is here to help with branches in Pryor and Tulsa.
We believe in supporting the growth of Oklahoma businesses and building relationships with business owners that last a lifetime. Whether you’re in Tulsa, Broken Arrow, Norman or Oklahoma City, we’re here to help business owners get the financing they need to help their businesses grow. Request information on an SBA Loan today with First Pryority Bank.
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