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How To Get A SBA Loan : Start With a Solid Business Plan

Updated on July 20, 2012

Visiting any small business oriented website and/or forum on the web is likely to result in one seeing the same question repeated over and over again. The question revolves around how small business owners can secure a Small Business Administration loan. If one was wondering how to get a SBA loan before visiting these forums or sites, then they are in luck because the process is not actually as intimidating as it might seem on the surface. In fact, it all starts with something that one should already have the basic framework for: a business plan.

Of course, many businesses start without a really solid business plan but more of a general idea of what they want to offer and how they plan on making that translate into a profitable enterprise. A business plan for an SBA loan will need to be a little more thorough than this, and the SBA.GOV website offers some basic advice on preparing for a plan. The first step before asking about how to get a SBA loan is actually determining if one has what it takes to be an entrepreneur in the first place. Managing a business is not as easy as it seems, and become far more complex when employees are brought into the company as part of an expansion. Not everyone is cut out to be an effective manager, but that does not mean the end of a business plan. It is possible to recruit managers and let them worry about the day to day things while the founder(s) worry about the big picture.

A good strategic plan will incorporate these elements and more. One of the most surprising things that needs to be constantly assessed and addressed in any business plan is the potential weaknesses of a business. Is an idea too reliant on a specific vendor? If that vendor were to change their business practices or cease its operations, what would the effect be on one’s business plan and how would they plan on recovering? What would happen if someone else were to copy one’s idea? Keep in mind that litigation takes time and money, which are not things most small businesses are blessed with in the face of strong competition. Examples of this include countless companies versus Microsoft, who usually outlasted the litigation costs and ran the smaller companies out of business.

A strong business plan will include an overview of the executive(s), the market(s) in which the products or services will be offered, a description of the company, organizational and managerial methods and practices, marketing plans, service and/or product descriptions, a request for funding, and a list of the assets and funds that the company has. Remember that most SBA loans will only be issued for less than a quarter of the current assets of the company and will often require collateral.


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