OK there is a portion of the SBA loan that is guaranteed by the government. The amount of SBA guarantee is dependent on what the government's fiscal policy is at the time of the loan. The remainder of the loan is guaranteed by the lender. Any good bank SBA department should have an idea of this based on how much you are asking for.
Which brings up a good point....Make absolutely sure you are dealing with a good SBA department. You are going to have to go through a lot of hoops and fill out a lot of different forms to get your loan. You want an experienced SBA lender. Our loan was through a bank that was not experienced in SBA loans and it took four times as long to get the loan funded. We started our loan process in August and did not get funded until December. This delay was a direct result of a disorganized SBA department.
When you interview the SBA loan officer ask them how many SBA loans they do per year. Do not be intimidated by the loan officer, some of them act as if they are doing you a huge favor by meeting with you. Ask what their average time frame is from beginning to end. Ask if they have any business owners who have been through the process that would be able to answer questions from an owner's perspective. The bank should have a paperwork checklist for you. This checklist should be the same for each bank, I will try to list off some of the items from memory....
- Personal credit reports for each owner or guarantor
- Personal Financial Statement which consists of all assets, bank account balances, life insurance, securities, monies receivable, etc..
- Business Financial Statement which will include your Profits & Losses, bank balances, assets including inventory, accounts receivable, expenses, also your projections (I think 5 year)
If you are using an asset for part of the guaranty, such as a house, they will have it appraised. This was part of our issue as our house is not in the same state as the business. At the initial meeting with the SBA officer I asked if they needed a phone number for an appraiser which they declined. Three months later they came to me and asked for the phone number!!!! Like I said, disorganization. A lot of banks will not take an out of state asset to guaranty the loan.
In our area we have Gateway Business Bank and they have a very good reputation for being organized with their SBA loans. I met with their representative recently and voiced my concerns about the SBA process based on my previous experience. He addressed all of my concerns and while he did ask some very tough questions he was very interested in helping us.
Get your business financials, P&Ls, business plan, and personal financials together before meeting with the SBA loan officer. Have your guarantor on board before going to the SBA. Showing up with your ducks in a row will put you in the driver's seat and you can find the bank that is a good fit for your business.
You own Little Traveler right? How long has the business been operating?
I have at least one of the forms I can email to you to start your organization. You'll have to fill out the form specific to the bank you choose but at least all of the information will be the same.