Constructing a Solid Business Plan for Your SBA Loan Application

When you apply for a mortgage loan or automobile loan, you usually don’t need to tell your loan officer your plans for your house or car. Many small business owners may wonder why the same does not hold true for a small business loan application. SBA loans require business plans because they need to see that the small business owner has a plan for their future. Many small businesses fail due to cash flow issues, and the U.S. Small Business Administration needs to know that your business has a real plan for managing its funds.

Creating Financial Statements and Cash Flow Projections

The most important aspect of your business plan will be your financial statements and your cash flow projections. You need to show that money will be coming in, and that you will have enough money to reliably pay back your loan. To give the bank this information, you will need to have accurate and timely financial statements. These statements should go back three years, and should be able to support anything you are claiming, such as a stable increase in revenue over time.

Backing Up Your Plan with Data

The other aspect of your business plan that is extremely important is what you will be doing with the money from the SBA loan. The Small Business Administration will want to know exactly how you intend to use their funds to better your business and why you need to acquire these funds from them rather than through other avenues. If you can’t provide a reasonable plan for the future, the Small Business Administration may feel that you will simply need more loans in the future or that you don’t really need the loan they will provide.

Procuring an SBA loan may seem like a complicated process, but it’s an invaluable resource that has helped many small business owners nationwide. Most lenders will be willing to work with you over time to secure the data you need to acquire your loan, but putting in the extra effort up-front will make for a quicker and easier application process.

About Bruce Hurta

Bruce Hurta has extensive experience in Small Business Lending. He has served in a number of commercial lending and banking capacities in his career including, President of a Houston-area community bank for 6 years, managed Independence Funding Company, a non-bank start-up in 1994, where he developed his SBA lending expertise. Bruce spent 4 years in Finance as a bank examiner for the Texas Banking Department, 7 years in executive management at two community banks, and 25 years as a specialty SBA Lender. He is active in the commercial realtor and business brokerage communities, along with various business and industry organizations. Bruce Hurta is Vice President - Government Guaranteed Lending in Houston, TX for Ameris Bank SBA and USDA Lending nationwide. Ameris Bank offers SBA and USDA loans for small businesses to purchase or construct new buildings for their small business operations, to acquire a business, to expand a business or to buy out a business partner.

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