A big challenge for business owners is developing working capital. The right kind of loan can help bridge that gap. The Small Business Administration provides a government-guaranteed loan program, designed to help small business get the funds they need more easily and provide more flexible terms than conventional loan options. Small business administration (SBA) loans allow for new business growth, research and development funding, expansion into different areas and enhanced profit.

SBA loan proceeds may be an ideal funding solution for

  • business acquisitions
  • debt consolidation
  • start-up expenses
  • inventory or real estate purchases
  • construction of a new building
  • purchase of long-term equipment  or machinery
  • and much more!

Before applying for your first SBA loan, take a look at these guided tips on how to prepare a robust application that will help secure the funding that you need.

Step 1) Educate and Tell Your Story

You’ll want to start out by creating a detailed business plan that gives an overview of your company and the goals you would like to achieve. It’s important to show that you’re dedicated to being successful with your first-time business loan, so you’ll want to include answers to some of these questions:

  • What is an executive summary of your business?
  • What are the products or services being offered?
  • What industry does it fall under?
  • What kind of clients or target demographic do you serve?
  • How do you generate revenue?
  • What are the margins?
  • What are you using this loan for?
  • How will your sales plan achieve your goal?
  • Can you give evidence (financial projections) to support a successful track record in the future?

Step 2) Determine Your Funds

Knowing how much to ask can be tricky the first time around. A new business will typically need funding to support their growth for the first 12-36 months. Meet with your accountant to discuss an appropriate and realistic borrowing amount needed to help you grow your business. They can also help in developing and auditing certain financial statements for submission.

Step 3) Clean Up Your Credit

Lenders look at borrower’s credit reports, credit score and history of making timely payments to assess credit risk and interest rates being charged. If a business has an unsteady repayment history, they might have a more I=difficult time securing the small business loan. SBA loans are so popular because they are backed by the government and allow lenders to take a chance on companies that may not necessarily qualify for more traditional commercial bank loans. Nonetheless, it is crucial to clean up your score and financial history as it will be a large part of the conversation with a lending officer.

Step 4) Relationships Matter

It’s a good idea to find a banker that regularly works with SBA loans and has experience dealing with any unique circumstances. Community banks are focused on building relationships with their clients and take the time to learn your business, so they make be the more beneficial choice and resource for you. Think of a good banker as your business partner except you don’t have to share your business profits with them!


Bank of Southern California has been recognized as a top small business lender in San Diego County by the San Diego District Office of the U.S. Small Business Administration for many years now. We are also an SBA Preferred Lender, which means that the Small Business Loan Administration granted us the authority to expedite the approval of loans. The bank is also recognized as the top lender by volume by the State Loan Guarantee Program (trailing last 4 quarters). Therefore, if you need a loan, the bank has several options for you to consider. Contact us today to find out more!