Starting a business is rocky, and the need for funds is just one problem people may encounter.

In the past, one solution new companies have sought has been to apply for a small business loan from the Small Business Administration (SBA). Unfortunately, the economic climate of recent years has caused banks to adopt a highly risk-averse stance toward small business loans. A slim percentage of those who apply for a small business loan today are approved.

If you do choose to apply for a small business with the SBA, whether for a new business or in hopes of expanding an existing one, these are the roadblocks you may encounter along the way:

Bad credit

Although it’s an old method of assessment, banks base their decision heavily on credit reports, so if your credit history isn’t spotless you may run into trouble. Credit reports don’t always show the whole story–for example, if a debt you struggled to repay was beyond your control–but a FICO score can stand between you and the money you need for your business.

No collateral

In some cases, banks may require a business owner to put up something of value as a secondary method of repayment. This can mean equipment, inventory, or even entire buildings. If your business doesn’t own something of enough value to cover the cost of your loan, you may be denied.

A mountain of paperwork

Bad credit and collateral aside, the application process alone makes it hard to get a small business loan. Courtesy of the SBA website, here are just a few things you’ll need to apply:

  • Your personal background including previous addresses, criminal history, educational background, etc.
  • A business plan including a complete set of projected financial statements including profit and loss, cash flow, and a balance sheet.
  • Income tax returns for the past three years.
  • One year of personal and business bank statements.
  • Legal documents including copies of contracts with third parties, commercial leases, franchise agreements, and business licenses.
  • Resumes, particularly if the loan is for a new business.

That’s just a sampling of the documents a bank may require when you apply for a small business loan. As you can see, just starting the process is complex. And with banks rejecting 82% of small business loan applications, many small business owners have stopped bothering to apply.

That’s where we’re filling the gap.

Brass Financial Group makes it easy

How hard is it to get a small business loan with Brass Financial Group? Not hard at all. All that’s required is filling out our quick loan application, and a loan officer will be in touch with you as soon as possible. We’ll start the process immediately so you can receive your loan in as little as two business days.

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