Financing options are available to non-US citizens living in the US legally. But similar to your personal credit score, higher is better: Aim for a score of 140 or better. New York, NY 10017. If you need money faster, again, alternative loans might be a better option. As mentioned before, most SBA loans don’t have a time in business requirement, but lenders who make these loans often do. If approved, you’ll receive the initial SBA disaster loan disbursement of $25,000 within 5 days. Companies that were in business as of February 15, 2020, may qualify for full or partial forgiveness. Small United States-based for-profit businesses can qualify for SBA loans. Check with the specific lender you plan to understand its requirements. The SBA loan requirements help identify small businesses eligible for SBA financing. The SBA doesn’t set any specific timeframes for most loans, but the lenders can set their own requirements. If you’re a veteran entrepreneur, explore SBA loans for veterans. But you have to be willing to put in the effort. If a business receives an SBA-guaranteed loan for $5 million, the maximum guaranty to the lender will be $3.75 million, or 75 percent. Those who are delinquent or have defaulted on a federal loan or federal financing program may not be eligible, though there are exceptions. The Paycheck Protection Program loan was established to assist struggling businesses with payroll costs during the pandemic. You must have a physical location and mailing address in the United States. As a Canadian citizen, you may be eligible for SBA financing if you’re a nonimmigrant (documented) alien of the US and have received an eligible visa. Have at it! You might be surprised to learn that your personal credit history matters when applying for an SBA loan. This is referred to as the “credit elsewhere test.” You don’t necessarily have to provide rejection letters to prove this, though. The Economic Injury Disaster loan requirements are based on similar SBA disaster loan requirements that have been used in the aftermath of a hurricane, tornado, or other physical disaster, but in this case related to the economic injury caused by the COVID-19 coronavirus. That being said, SBA lending does require certain qualifications, and the loan process can be complicated. Only businesses that are both owned and operated in the U.S. qualify for SBA loans. In addition to having an acceptable credit score, you must also have a clear credit history with regard to government debt. As long as they meet the minimum SBA requirements and don’t discriminate, they can add their own requirements. If you need to receive funds quickly, you may be able to receive a quick decision from an alternative lender. As a small business owner, you need to stay apprised of financing options so that, should the day come that you want to grow your business, you know the best financing solution for your needs. The SBA does not set a minimum time in business requirement. SmartBiz offers SBA working capital loans up to $350,000 and commercial real estate loans up to $5 million with repayment terms of 10 to 25 years. Disaster Loan Assistance Federal Disaster Loans for Businesses, Private Nonprofits, Homeowners, and Renters Loan proceeds (up to $2 million) can be used as working capital to pay debts, payroll, accounts payable, and other bills. Typically your SBA lender will document this. In general, the passive income businesses that are ineligible for SBA financing are those that may be considered investment properties. SBA loan submission requirements include: Borrower information, with a list of owners, percentage of ownership, criminal background and other personal information Articles of organization The SBA wants to confirm that you have some skin in the game—owner’s equity matters here. An alternative lender might provide more suitable, short-term loans for various types of borrowers. LinkedIn You also likely need a credit score that will fall into the Very Good or Excellent rating. The following table provides an overview of loan terms for the most common SBA loan types: A common misconception is that the SBA issues loans. In general, businesses can only use SBA loan proceeds for legitimate and reasonable business purposes. Tricia has nearly two decades of experience in commercial and federal government lending. The SBA 504 loan requirements should be of special interest to you. The SBA prohibits loans to those who are Incarcerated, on probation, or on parole, (an individual with a deferred prosecution, conditional discharge, order of protection, or who is on a sex offender registry is treated as if the individual is on probation or parole); or who are currently subject to an indictment, criminal information, arraignment, or other means by which formal criminal charges are brought in any jurisdiction. How much a lender will require, however, depends on your creditworthiness, ability to repay, revenue, and the loan amount. While there are various types of loans offered, the SBA 7(a) loan requirements and those of the other SBA loan programs have similarities. Know ahead of time what assets you have that can be used as collateral against the loan and research the market value. Looking to buy owner-occupied commercial real estate? Sign up to receive more well-researched small business articles and topics in your inbox, personalized for you. Note that may include federal student loans. Most applications ask for your Social Security number and request permission to run a credit check for each owner with ownership of 20% or more of the business. Please help us keep our site clean and protect yourself. However, they are relatively stringent, and are as follows: Meet minimum lending activity level requirements (actively lend to customers) Have a board of directors with at least nine directors who vote No recent charge-offs or settlements 7. Fit Small Business content and reviews are editorially independent. Additional SBA loan requirements apply to startup businesses and require that the business owners be able to demonstrate managerial experience within the industry. Getting a CARES Act Loan A critical step in the application process to obtain an SBA backed loan is providing ‘Proof of Insurance,” or a “Certificate of Insurance” that meets the SBA Insurance Requirements. You must be logged in to comment. 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