Applying for a business loan is a major financial undertaking. And if you’re applying for an SBA loan in particular, your workload might increase that much more. Simply due to the amount of planning, financial reporting, and paperwork it takes to apply for an SBA loan—let alone get approved—it’s worthwhile to seek an SBA loan consultant to facilitate the process.
With the right SBA loan consultant, or alternative resource, you’ll get insight and assistance on your SBA application, and make sure you’re applying for the SBA loan program that makes sense for your business. Learn more about the programs and services available to small business owners, and get the help you need to apply for an SBA loan without breaking the bank.
Why Apply for an SBA Loan in the First Place?
For business owners who aren’t familiar with the US Small Business Administration (SBA), here’s a quick rundown:
The SBA is a government agency that provides funding, resources, and programs to encourage small business development. Through its lending program, the SBA encourages its partner lenders (most often banks) to finance small businesses. The agency partially backs these loans with federal money, guaranteeing that they’ll cover a portion of defaulted loans. Since the intermediary lenders are facing less risk when they disburse these loans, they can offer some of the lowest interest rates, longest repayment terms, highest capital amounts, and all-around best value loans on the market.
That lowered risk for lending banks also makes these loans more available to more borrowers than other bank loans. However, there are still demanding eligibility requirements, and extensive paperwork to organize and complete. And not all small businesses are approved.
The SBA offers several loan programs, but the two most popular are the SBA 7(a) loan and the SBA 504/CDC loan. The first is the most flexible option, since you can use these funds toward almost anything you need: equipment and machinery, soft costs, working capital, you name it. SBA 504/CDC loans, on the other hand, can only be used to purchase real estate and major fixed assets.
Regardless of whether you’re applying for an SBA 7(a) loan, an SBA 504/CDC loan, or another type of SBA loan entirely, keep in mind that SBA loans can take weeks or months, rather than days, to be processed and approved. They also carry long repayment terms—up to 25 years, if you’re approved for a 504/CDC loan for a commercial mortgage—so it’s important to plan ahead, both for borrowing and repaying your SBA loan.
What You Need to Know About the SBA Loan Application Process
For the best chances of approval for an SBA loan, you’ll need to come to the table with evidence of strong business and personal financials, a healthy credit score, and proof that you’ll use your SBA loan to positively grow your business. And you’ll need to meet the SBA eligibility requirements for your application to be considered in the first place.
To prove these credentials, you’ll need to provide documentation—and lots of it. Some of those essential SBA forms you’ll need to provide include:
- A comprehensive business plan, including management resumes
- Information about your loan request and how you plan to use your funds
- Business financial documents, like cash flow statements, P&L statements, and business debt schedule
- Personal financial information
- Proof and value of collateral
- Business entity documents
- Evidence of business insurance
Some of these forms and documents are more straightforward than others—it should be pretty easy to photocopy your driver’s license as proof of identification, for instance. But others—like your written statement explaining the nature of your business, your intended use of your loan, and why you can be trusted with those funds—might require some extra help.
Why Hire an SBA Loan Consultant?
SBA loans are among the best financing tools out there, but, as you can tell, they’re not exactly easy to figure out. Running your own business is more than a full-time job, and you might not have time to study the details of the SBA loan programs, and their applications, all on your own. That’s exactly when a professional’s help might be worth the investment.
With the help of a guide, you’ll be certain that you’re not only filling out all your SBA forms appropriately, but that you’re applying for the right SBA loan program in the first place. Even for the most organized and informed of entrepreneurs, it’s a lot of information and documentation to stay on top of.
But before you can effectively seek out guidance from a professional consultant or firm, try to pinpoint the areas of your SBA loan application where you need the most assistance. You might already be familiar with some aspects of the process, in which case you can choose to only seek outside assistance on specifics. If you’re worried about spending too much of your time carefully reviewing contracts and tax documents, legal and accounting professionals can make the loan application process more efficient. When considering if it’s worth it to hire a contractor or consultant, think about how much (estimated) time an expert will save you, and compare it with their quoted rate.
How much should you pay an independent contractor? Unfortunately, there’s no universal standard. Reviewing your budget is a good way to determine how much money you can afford to allocate to hiring a loan consultant. Then, consider how much of your available capital you’re willing to invest in your SBA loan application, with the risk of being denied and taking any loan fees as a loss.
Any consultant or broker your work with will charge you at varying rates, but you can likely expect to be charged in one of the following formats:
- Hourly: One small business online platform quotes business consultant hourly rates between $50 and $180, and a single session might cost as much as $500.
- Monthly retainer: If you expect to work with a consultant for an extended period and requiring more or less full-time support, you might want to switch to a monthly retainer.
- Flat fee: Workshops or single sessions you attend are likely a one-time payment, which is the most straightforward way to budget for a consultant.
- Loan broker fees: Applying for an SBA loan through a loan brokerage firm will incur a fee based on the size of the loan, in addition to flat fees, like processing fees.
Where to Find Your SBA Loan Consultant
An SBA loan for your business might seem like an ideal financing solution—and the most challenging to secure. Navigating bank paperwork and compiling comprehensive financial records demands time, energy, and attention to detail, and a loan consultant, mentor, or specialist can provide the guidance or expertise you need to successfully apply for an SBA loan.
Often the best resources for small businesses are close to home. Federal agencies and programs, as well as local business communities, can provide growth and mentorship opportunities. And depending on the kind of guidance you’re looking for, you can seek out mentors and programs focused specifically on loan application processes.
Your Local SBA Office
If you’re applying for an SBA loan, you might as well go right to the source: Getting involved in your local SBA center is worthwhile for both established business owners, and for those who are just starting out. Especially if you’re new in town, finding your local SBA office can help you connect to programs, resources, and mentors in your area.
Your Professional Network
Other small business owners who’ve used a loan consultant are a great resource for finding local professionals. Consultants are often freelance and rely on referrals, so it’s worth reaching out to your business network about trusted independent contractors. Local business directories or your Chamber of Commerce might also have information about consultants in the area.
The SBA also supports the nonprofit organization SCORE, which provides free business education and resources for entrepreneurs, including mentorship programs, specialized advice, and hundreds of webinars.
For no cost, business owners can request a SCORE mentor, or search for mentor by expertise, and even specify the area where you need guidance—including help with financing and loans. In addition to mentoring resources, SCORE has published guides that might help you educate yourself about SBA loans.
Explore your options for online loan consulting, even if you don’t plan on using an internet solution. Comparing different consulting options is easy online, can help you find out what’s available, and give you an idea of the range of services and pricing.
In addition to convenience, an online consultant or service might be the fastest way to start getting the professional help you need to speed up your SBA loan application (although the approval window might still take a few weeks).
The loan application process may seem long, but you can find a consultant to help you in a few minutes. Use a website like Thumbtack, which is dedicated to connecting business consultants, or a broader freelance and contracting platform like Upwork.
Online Loan Consulting Firm
An online search will return hundreds of SBA loan consulting and brokerage firm websites, which will usually offer a free quote on a consulting fee. However, some business loan brokers charge super-high fees, so look into best practices when finding a fair and reputable business loan broker.
And if you don’t want to pay a fee at all, you can find loan specialists online who’ll work with you to find the loan that makes sense for your business—whether that’s an SBA loan or something else—and package and send your application for you, all at no cost.
Resources for Underserved Entrepreneurs
There are significantly fewer SBA loans for women, but there are organizations providing education and mentors for underserved and excluded groups. The SBA’s Women’s Business Center can direct you to resources dedicated to connecting women with mentors and opportunities.
Loan Consultant Alternatives
While you definitely want to verify that a lender is certified, a consultant doesn’t necessarily have to be a licensed SBA officer. Although it requires more time and effort to guide yourself through the process, it’s possible to successfully apply for an SBA loan without a consultant.
Webinars, Tutorials, and Guides
For many new businesses, hiring a loan consultant might not be feasible. But, as an entrepreneur, you’re likely already independent, dedicated, and willing to learn—and fully capable of navigating the process yourself.
You can look directly to the SBA educational resources for current information and tips for securing a loan, and consult online SBA loan application guides from free online sources. There is a lot of helpful information that can help you educate yourself about SBA loans on the internet, but you need to be discerning and trust your own judgement when it comes to taking advice, whether it’s online or from a hired consultant.
Accounting Specialist or CPA
If you feel comfortable applying for an SBA loan on your own, you might still benefit from an external accounting consultant. They can help you organize and maintain financial records, and verify their accuracy, before you move forward. Depending on the extent of financial records a loan application requires, and your team’s accounting bandwidth, a tax accountant or CPA can ensure that everything is in order before you turn your records over to a bank.
Need an SBA Loan Consultant? Explore Your Choices
Don’t let the SBA loan program’s lengthy application process scare you off from applying at all—that’s exactly why many entrepreneurs choose to hire a loan consultant. Local resources and community groups can introduce you to free programs and mentors, as well as connect you with professionals in your area who might be able to provide the consulting you need. Or, work with a loan specialist who’ll walk you through every step of the application process, totally free.
Ultimately, your SBA loan application reflects your business and finances, and a loan consultant or contractor simply facilitates the process by helping you present the best application possible. Educating yourself about what kind of guidance or support you need to successfully apply for an SBA loan will lead you to the right resources—and people—to help you get the job done.