How to prepare your SBA loan application 

Know your business

We and the SBA want to be confident that you know your business inside and out. And one of the first things the SBA is going to check is your credit rating. You’re aiming to do two main things:

• Ensure your personal and business credit report is up-to-date and positive
• Identify any inaccuracies and get them cleared up.

We and the SBA are going to want to know that you’re fully prepared to explain your credit rating.

Documentation

Regardless of which loan you’re applying for, there’s paperwork that applies to all of them. Getting all of the below organized in advance will not only speed up the process but will demonstrate to us and the SBA your diligence:

• Personal background – it’s important to be honest here. Include your educational and business background, and your previous addresses going back at least two years.
• Business plan – this a vital part of the application process. The SBA will want to understand your business and its strategy, reasons for applying for the loan, planned goals and objectives and proposed staff and their roles.
• Resume – clearly layout your employment history, both as a business owner and as an employee. Emphasize evidence of management or business experience, especially if you’re starting a new business.
• Debts – the SBA will want to know what your liabilities are and it’s useful to be able to provide that information immediately.
• Your contribution – it’s important to show how you’re contributing to your business. Inform them of your assets and liabilities, experience in business, skills, and abilities, and income and living expenses – you’ll need to show how much you’ll be taking out of your business to fund your personal commitments.

Once you’ve collected the information around the history and state of your business, it’s time to locate the financial documents. We and the SBA will want to see:

• Income tax returns – you’ll need your personal and business returns for the past 3 years.
• Financial statements – one year of personal and business bank statements is common.
• Legal documents – these are business licenses and registrations, copies of contracts with any third parties, and commercial leases, depending on what’s required.
• Loan application history – list any loans you’ve applied for in the past, as well as any applications that may have been declined.

SBA forms

There are several forms you’ll need to fill out, depending on the loan you’re applying for. In most cases, you’ll have to complete:

Borrower Information Form (1919)
This is one of the longer forms you’ll need to complete, and if you have a business manager or another loan guarantor, they’ll need to complete this form as well. It also applies to all small business structures.
This form is used to determine your suitability for a loan. This is why they’re interested in any criminal background or delinquent debts. It’s essential that you complete this form honestly. If you misrepresent yourself in any way and get caught out, the SBA will blacklist you for any further applications.

Statement of personal history (912)
You should attach this form to your own personal background information. If you answer Yes to anything that requires extra information, then it’s helpful to attach any relevant documentation.

Personal financial statement (413)
This is one of the tougher and more tedious forms to complete. It should be attached to your financial statements since you’ll need those to verify the figures you’ll be entering on this form. Remember that the SBA will want to see proof of each of the figures you enter, so it’s a good way to make sure you have all the financial statements necessary.
The SBA uses this information to determine if you’re a good risk, i.e. that you’ll be able to meet the loan repayments.

It’s always best to do these forms with your HarborOne bank manager or accountant, or at the very least, get them to review the paperwork before you submit it to the SBA.

Check your credit rating

As a business owner, you want to be confident your credit rating is sound so it’s important you’re aware exactly where you stand. Staying on top of your credit rating can help identify any blemishes on your personal and business credit report and fix or clear up any inaccuracies.

Here’s what we recommend:

• Request your credit report from AnnualCreditReport.com. They collect data from the three major credit bureaus: Equifax, Experian, and TransUnion. You have the right to obtain one free credit report per year. Fill out the online request form with your personal information, select which credit bureau’s report you want to access (you can choose one at a time or all three).
• You’ll receive your credit report online. Review it carefully to ensure all information is accurate and up to date. Check for any errors, such as incorrect account information, late payments that you believe are inaccurate, or accounts that may not belong to you.
• Your credit score is a numerical representation of your creditworthiness based on the information in your credit report. You may check your FICO^® Score for free on Experian. The credit score calculated on Experian is based on FICO Score 8 model. Keep in mind that your lender may use a different model. Many credit card companies may also provide free credit scores to their customers.
• If you find errors on your credit report, contact the credit bureau in writing to dispute the inaccuracies. They are required to investigate and correct any errors within a reasonable timeframe.

Checking your credit rating regularly helps you stay informed about your financial health and ensures that your credit information is accurate. This knowledge is crucial when applying for loans, mortgages, credit cards, or other forms of credit, as lenders use your credit history and score to assess your creditworthiness and determine loan terms.

Summary

At the end of the day, it’s all about due diligence. The better prepared you are, the more streamlined this process will be. Remembering that the funds are coming from us, it’s wise to complete your application with our assistance. Not only do we have their own criteria, but as an SBA lender we’ll be able to guide you through the process.