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Are you a time-strapped business owner who’s been turned down by your local bank? Are you turned off by the time and effort you’d need to put into an SBA loan application?
If you’re saying yes and yes, then applying for an SBA loan through the alternative lending SmartBiz could be a smart option. Here’s what you need to know.
A Small Business Administration (SBA) loan is a government-guaranteed long-term loan made by an SBA-approved lender. It lets even early-stage businesses get a low-interest long-term rate loan that can be used for a variety of business purposes.
“Most businesses can qualify for a SmartBiz SBA loan if they’ve operated for at least 2 years, have no recent bankruptcies or foreclosures, and have positive cash flow,” says Judy Balint, CMO at SmartBiz.
SmartBiz makes good sense for businesses that might actually be overqualified for typical alternative lenders. SmartBiz’ rates are much lower than their competitors’ in the online business loan space: current effective APRs range from 7.21% to 8.44%. (That’s the Wall Street Journal prime rate plus 2.75-3.75% of additional fees, in case you’re wondering!)
“A typical SmartBiz borrower has $50,000 to $5 million in annual revenue, 1 to 40 employees, show profitability and positive cash flow, and can demonstrate that they can afford their monthly loan payments,” according to Balint. Small business owners use SmartBiz SBA loans for a wide range of reasons, from consolidating existing and eligible high-interest debt to increasing marketing efforts, hiring employees, and buying equipment.
Before you start the application process for a SmartBiz loan, take a look at their basic requirements. According to Balint, successful applicants must have a minimum of 2 years in business. It must also be U.S. based and owned by US citizen or Lawful Permanent Resident who’s at least 18 years old.
And as with any loan application, the financial details of your small business matter. Balint says that applicants also need to meet the following criteria for a SmartBiz loan:
In addition, she points out that certain industries can’t qualify for SBA SmartBiz loans. “Please note that there are industries not eligible, including gambling, lending, life insurance, religious teaching, primarily political and lobbying activities, oil wildcatting, mining, mortgage servicing, real estate development, bail bond, and pawn or private clubs, among others,” she says.
SmartBiz SBA loans range from $30,000 to $350,000. It’s also important to keep in mind that, for loans over $30,000, SBA lenders need certificates of insurance and landlord subordination agreements.
Have this information handy, because you’ll need it to support your application.
Some of the documents you’ll want to have prepared are:
Depending on how much money you’re asking for, you might have to provide additional financial data. “The larger the loan size, the more financial data is needed,” Balint says. “Although SmartBiz doesn’t require some of the documents required by other lenders, like resumes, business projections, or a loan application history.”
Applying for a SmartBiz loan doesn’t take long. Here are the 3 steps in the loan application process.
According to Balint, SmartBiz requires the basic information you’d expect, like your business name, tax ID number, address, business owner name, SSN and address. “Please note that we ‘soft pull’ credit so there’s no impact on credit scores during pre-qualification,” she says. For qualified applicants, a “hard” credit pull will happen when your application reaches the funding stage.
If your business documents are well-organized, Balint says it should take as little as 30 minutes to underwrite. The SmartBiz loan application is set up as an online self-serve process, although sometimes applicants don’t use the self-serve option. If that’s the case, a Relationship Manager will call you immediately after pre-qualification.
You can get that funding in as little as 7 days once you’ve fully completed and submitted your application, although it takes a bit longer on average.
In addition to providing SBA loans faster than traditional banks, plus a speedy and convenient online application process, Balint says that SmartBiz “offers the lowest rates among online lenders.”
And SmartBiz ranks high in customer satisfaction, too. “90% of our customers were ‘very satisfied’ with their SmartBiz experience based on a March 2015 survey,” she says. “Additionally, we have an average of 4 out of 5 stars and a ‘Great’ rating on TrustPilot.”
If you’re in the market for an SBA loan of $30,000 or more, take a look at what SmartBiz has to offer.