By Jeff Rosen

Small businesses are often touted as the backbone of the economy, but starting a business and keeping it growing often requires plenty of capital. Fortunately, small business owners have several resources at hand to secure financing for a variety of needs, from acquiring a business and expanding a business to purchasing property or equipment for expansion.

The Small Business Administration (SBA) is an excellent financing resource, offering a series of loan products that could benefit your business, whether you’re just starting out or looking to expand. A typical candidate for an SBA loan is an entrepreneur who has grown his or her business, demonstrated an ability to create cash flow and meet debt obligations, but may be without significant capital to invest in expansion or new equipment.  SBA is also a wonderful resource when you are without the needed collateral to qualify for conventional financing.

Some benefits to the SBA programs include lower down payment requirements, longer amortizations, and lower cash flow requirements.

If this describes your situation, following are easy steps to access the capital you need through your local bank and its relationship with the SBA.

Do Your Homework

Before you apply for a loan, take time to research current SBA offerings. The SBA offers a variety of loans to support small- to mid-sized businesses at various stages, from startups with one to two employees to businesses that have outgrown their current space. To quickly identify the tools that may help you start or expand your business, visit the SBA’s Loans and Grants Search tool.

Some of the SBA’s most popular programs are:

  • 7(a) program: The SBA’s most common platform, 7(a) helps startups and existing small businesses with financing for a variety of general business purposes, including business acquisition or expansion, partner buyout, purchase of fixed assets such and real estate, equipment and inventory, along with refinancing of existing business debt and working capital.
  • CDC/504: This loan allows a business to purchase major fixed assets, such as long-term equipment or commercial real estate. To be considered in general, businesses must have a tangible net worth less than $15 million and an average net income of less than $5 million after taxes.  –
  • Export Working Capital Program: This program provides up to $5 million in advances for companies engaged in export transactions. The funds can be used for a wide range of purposes, such as financing supplies, goods, letters of credit, and working capital.

Specify Your Loan Amount

Determine exactly how much money you need. Some borrowers may think that submitting applications with an unspecified loan figure means that banks will come back with a number that represents how much they qualify for, a number that could exceed what’s really needed. What banks really want is to see that business owners have done their due diligence and are realistic not only about how much they think they will need, but how the loan will be repaid.

Gather your Paperwork

Be prepared to support your loan request with necessary documentation. For new businesses trying to get off the ground, such paperwork may involve providing the lender with a business plan that explains your purpose, systems and projections as well as any additional sources of capital. For existing businesses, banks may require up to three years of tax filings and operating statements to develop confidence in a company’s stability and long-term prospects. Personal financial information will also be requested, so be prepared to discuss your financial and credit histories, as well as business experience

Have a Payback Strategy

No matter the size of the loan requested, lenders want to know they’ll be repaid in full and on schedule. Develop a payback strategy before meeting with a banker. If the funds for repayment will be generated from business operations, be ready to show past performance as well as future projections. Lenders typically want to see that businesses can more than cover their payments; with a cushion, borrowers should be able to experience some temporary or unexpected interruptions in cash flow without harming their ability to fulfill their obligations.

Be Prepared with Collateral

A lender will want to secure a loan with something of value, so be ready to offer collateral. Often, collateral is real property, such as a personal home or car. Collateral could also include the assets of a business, such as inventory or equipment, as well as personal or business investments or cash deposits. All SBA loan will require personal guarantees.  The risk in offering collateral, of course, is that it could be lost in the event of defaulting on the loan.  However one of the benefits to using the SBA programs is that typically less collateral is required compared to traditional bank financing.

Develop a Banking Relationship

Your banker can be a great ally. A long-term relationship with a banker can offer business owners many benefits: a banker will develop a sense for the company’s activity and growth and may be able to suggest products that could improve efficiencies while keeping costs in check.

Whatever your business’s financial need, talk to your banker to consider all of the options available. Small businesses are the backbone of many communities, and banks want to support the growth of these entities to ensure the vitality of their communities.

Jeff Rosen is Senior Vice President of Business Banking for Regions Bank. Jeff has more than 25 years of SBA banking experience and can be reached at