Did you know that around 99.9% of businesses in the United States are small businesses? The Small Business Administration (SBA) exists to help support small businesses – the backbone of our local economies and communities – and ensure they have the capital needed to function.
The SBA works with local lenders to help small businesses access loan funding, to the tune of almost $40 billion in 2024. While there are a number of ways to secure business funding, the SBA provides specific benefits through its loans, including lower down payments, favorable terms, and access to capital that may be more difficult to secure through other lending options.
If you’re a business owner interested in SBA funding, keep these four steps in mind to best position yourself and your business to thrive.
The first thing to do when preparing to apply for any type of funding is to understand what your business looks like financially and to have a clear purpose for the use of the funds, according to Jeff Hansel, Senior Vice President and SBA Market Executive at Rockland Trust. “A lender may ask about your revenue or profits, and you need that info ready,” Jeff explained. “Prepare for a discussion, know your facts and figures, and have your financials with you. It goes a long way.”
Jeff recommends bringing documentation with you for any meeting with your lender, including your tax returns, business plan, business credit report, balance sheet, and financial statements. This will help your lender understand where your business is currently and how a loan may help it grow.
To help with your financials, Jeff suggests hiring a good bookkeeper or accountant, whether you keep that person on regular staff or hire them on a per-diem basis. Having someone to help keep your books in order will help as your business grows or expands. For example, they can help ensure you have documentation in a safe place, with copies in case necessary, and can also help ensure you have the appropriate financial records you need when meeting with an SBA lender.
But having a strong team of advisors doesn’t stop there. A good business banker can play a pivotal role in supporting your business and can also help you draft the rest of your team. “If a customer has a question we can’t answer, we refer them to someone that we know and trust who can,” Jeff explained.
A lawyer, insurance agent, human resources expert, marketing professional, and business coach are other good additions to your overall team that offer differing perspectives to help you make key decisions. Ensuring you have the support and expertise you need will help your business succeed, grow, and thrive.
It’s important to know that the SBA does not originate loans itself, but helps underwrite loans for small businesses with Preferred Lenders like Rockland Trust. Finding the right lender to work with is key to SBA funding.
A local lender can help you understand the ins and outs of financing options, while supporting you as you navigate any challenges or setbacks. Choosing someone with local expertise and knowledge of your industry has specific, important benefits. It’s important to know that not all lenders offer the same SBA loan options.
“If we’ve seen the ebbs and flows of the business, then we know what to expect,” Jeff explained. “It makes us better at helping you.” Choosing a lender with mutual trust and history can help as you consider taking risks to help your business grow, in particular. They can also answer questions specific to your business and potential funding needs.
Once you’ve done your research and selected a bank that manages a relationship with SBA, you’ll be in a great position for faster, streamlined, and local funding.
In addition to advice from your team and lender, Jeff recommended using local resources to understand what an SBA loan can do for you. He explained that SBA and related parties, like SCORE, have plenty of resources to help prepare a business owner for taking out a loan or to help them improve their business as a whole through practices like operational efficiency. For example, your business banking partner and SCORE can help you find a strong business mentor to help you on your journey.
SBA also has a handy guide that covers everything you may need, from help launching a business to advice to consider when you want to expand. You can also find helpful content in our free Learning Center to help you understand the best ways to start, grow, and manage your business.
Small Business Growth Starts Today
Funding a small business can be intimidating, but your dreams are within reach! And we’re here to help you achieve them. Interested in learning more about how to secure SBA funding for your business? Contact our team of business bankers today.
