How hard is it to get an SBA loan?

One of the most common questions I get from readers is:

“How hard is it to secure SBA funding?”

This is referring to the SBA 7(a) loans that I use, and that my students inside Acquisition Ace use to buy small businesses.

There are a lot of misconceptions out there about how the SBA loan approval process works.

Some people think it’s so complex, and so strict, that it’s virtually impossible for a regular person who’s never run a business to get approved.

But in reality, not only is it very possible... it happens all the time!

That said, you do have to meet a few requirements.

• You need a credit score above a 600 (the lender might make an exception if it’s lower, but you’ll have to put up a lot of assets as collateral to make up for it)

• You have to have a good track record of employment or business ownership (showing the bank your last three years of tax returns, and three years of your W2 if you’re an employee)

• And you have to fill out something called a Personal Financial Statement (PFS).

Basically, your PFS is where you list out all your assets (home equity, 401k, stocks, crypto, gold silver, cash, etc.) minus your liabilities (debts, loans, etc.). This summarizes your net worth.

The bank then uses all of this info to decide how big of a loan they’ll pre-qualify you for.

There are many steps afterward, and the overall process isn’t simple, but it doesn’t get much harder than that.

The most important thing to understand is that your loan-worthiness isn’t based so much on how impressive your resume is... but rather on how strong the business is that you’re looking to buy.

The bank just wants to know that it’s going to make its money back.

So if you’re bringing a business to the table that’s got:

• Fantastic cash flow

• A history of great performance

• And a team of A+ people on staff

The bank will overlook a lack of experience on your part and give you more wiggle room.

How do I know this?

Because inside Acquisition Ace, we’ve actually never had a single student that hasn’t been qualified at some level for an SBA loan… and most of them started with zero business ownership experience.

Anyway, the full answer to this question is way deeper than what I can cover in a single email.

If you want to learn more, I’ve put together a comprehensive 15-minute video that will walk you the entire process of getting an SBA loan from start to finish:

[Video]: How To Actually Get An SBA Loan (Step-By-Step)

— Ben Kelly

P.S.

And as always...

If you’re interested in buying a small business in the near future (or passively investing into a deal), and want me to send you leads, let me know here.

Or if you’re selling your business and want me to send you potential buyers, tell me about it here.