How the Manufacturing Industry Can Use SBA Loans
It is possible for manufacturing businesses to qualify for loans from the U.S. Small Business Administration. However, the application procedure involves a number of steps and can take a significant amount of time. If you are patient, though, and you meet the qualifications, you can obtain the funding that you require. Here are some tips on how to go about it.
Assess Your Needs
Before you approach a lender, calculate as precisely as possible the amount of financing you will need to meet your objectives. Conduct enough research so that you can break down totals into specific details. For instance, if you are planning business expansion, list costs of equipment, employee salaries, property rentals, and other expenses.
Provide Your Credit Score
Although the bank will independently obtain your credit report, when you submit your application you should be able to provide the details of your credit score and your credit history. When you research your credit history, look for any discrepancies you can resolve before you apply for your SBA loan.
Understand That Collateral Is Required
SBA loans are generally secured, which means you are required to put up collateral as part of the lending process. This may involve pledging your home or putting a lien on the assets of your business.
Give Details of Your Company’s Management
Lenders want to know details about everyone in key management positions in your company. Provide thorough resumes of the business owners and important managers, and include descriptions of what responsibilities they hold in the company.
Prepare Financial Documentation
Before approving SBA loans, lenders want to be completely familiar with your company’s financial situation. Prepare copies of bank statements, financial statements, and tax returns. To simplify the process of submitting these documents, ask your lender if electronic copies will be acceptable.
Share Financial Projections
Demonstrate through financial projections how much sales of your products or services will improve as a result of funding invested in your business through an SBA loan. Be as specific as possible in your estimations.
Expect a Time-Consuming Process
Answer any questions your lender may have, and provide any additional documentation. After you have submitted all of your information, have patience while you wait for your lender’s decision.
For more advice on SBA loans for the manufacturing industry, contact Evolt Capital.