If you are someone that is interested in getting an SBA loan, you should know that there are five critical areas that an SBA lender will consider in detail when deciding whether or not to underwrite the SBA loan. These five critical areas are going to be cash flow, collateral, credit, management experience and liquidity and if you plan to apply for an SBA loan, you better make sure you put careful consideration into each one of these specific areas. If you happen to be weak in one of them, you should probably be extra strong in the others, so it is not necessarily true that you have to be perfect in each of the categories. We will discuss some of these categories during this article, so that you can get a better understanding of them.

 

Cash flow is definitely one of the most important categories of them all, which is why it is the first category we will discuss. Cash flow is basically, in simple terms, a category in which the lender wants to make sure that the business is making enough money to service the costs to run the business, provide an adequate income to the buyer so they can pay their personal bills, feed the family etc...., plus service the debt that will be incurred if the SBA loan default is approved.

 

As the banks that could lend this loan are primarily concerned with risk management, the next category that we are going to talk about is going to be the collateral that you have to pay off the loan. In the instance that the person actually defaults on the loan they are given, collateral is an asset that is put on standby by the bank that they can take in exchange for a cash payment. Check out http://en.wikipedia.org/wiki/Small_Business_Administration to read more about SBA.

 

The credit of the borrower, which is very important to an SBA lender at http://sba-attorneys.com, is the third category that we are going to discuss. It is still possible to get an SBA loan, although you may not have the best credit, if the other categories of your business loan application are much stronger than normal. For example, if you have lower than average credit, but you own a home that is worth double the amount of loan you are asking for, it is still going to be possible for you to get a loan, since the bank will be ensured of repayment if something were to go wrong. On the other hand, if any of the other categories are weak; your credit score will be a major player in actually getting approved for the loan.