Learn more about strategies for effectively securing a loan for your small business here!

1. Securing a Small Business Loan
What to Know about:

2. Every small business needs substantial capital to get operations up and running.
Before a new business can become self-sustaining, entrepreneurs need start-up
funds for things like making a down payment on a storefront, hiring staff,
acquiring inventory, and more. Small business loans help owners accomplish
these objectives.
Small businesses account for 54% of all business sales in the United States, and
have accounted for 66% of all new jobs in the U.S. since 1970.
Since 1990, U.S. small businesses have added 8 million
new jobs to the economy, while big businesses have
added only 4 million new jobs.
When we support small businesses, we support
our local, regional, and national economy.
The Small Business

3. Small business loans provide entrepreneurs with the funds they need to accomplish
many different objectives. These SBA loans can be acquired when starting a new
business or at any time after as long as a business meets certain criteria.
For example, a SBA 7(a) loan can be used to:
• Purchase owner occupied real estate
• Purchase supplies and materials
• Construct or renovate a building
• Secure short-term or long-term working capital
A SBA 504 loan can be used for owner-occupied
commercial or industrial real estate, such as:
• An industrial building
• A restaurant
• A car dealership
• A doctor’s office
These are just two types of SBA loans. As you consider an SBA loan, determine which
program best fits the needs of your business.
SBA Loan Options

4. Eligibility
A current or prospective small business owner increases his or her chances of
securing a SBA loan when:
• He or she can present a strong business plan that makes clear how funds
received from a loan will be used
• The loan will not be used for speculations, gambling, etc.
• He or she has strong credit and proof of collateral
• He or she proves they have the means to pay back the
loan under reasonable repayment terms

5. Preparation
Applications for small business loans will vary depending upon the
selected loan program; however, business owners beginning the
application process will likely need to present:
• Financial statements from existing business and/or projected
statements with reasonable financial assumptions
• Business certificates
• Credit history of the business and its owner(s)
• Anticipated cash flow for 3 years (monthly for year 1)
• Resumes for each principal investor of the business
• Information about other ownerships/affiliations
• A strong business plan

6. The Business Plan
Your business plan will be one of the most influential parts of your
loan application. A strong business plan is comprised of many
components, which include a(n):
• Executive summary
• Company description
• Industry overview/analysis of competition
• Description of organization and structure
• Description of product or service
• Marketing strategy
• Funding request
• Projections of finance for the next 3-5 years

7. The average small business loan is approximately $375,000. However, there is
no “typical” small business loan because small businesses vary significantly in
size and needs. Most small business loans will not exceed $5 million.
Repayment periods for small business loans can also vary significantly. Some
loans are designed to extend over 25 years, while others last just 2-3 years.
The length of these periods can also depend upon what is being financed.
Your financial projections and proven ability to pay
will determine the amount of your loan and
the terms of your repayment.
Funding Factors

8. Additional Advice
• Be prepared
Though SBA lenders will be able to thoroughly discuss your loan options,
conducting research beforehand to gain a better understanding of typical
small business loan terms will only work to your advantage.
• Be honest
There’s no benefit to being anything but truthful when applying for a small
business loan. It’s in your best interest to secure a loan that adequately
reflects your needs and means.
• Tell your business’s story
Share what it is about your business that makes it valuable.
• Go Local
Local lenders better understand how a small business could be of value to a
community.

9. Find more information about securing small business loans in Philadelphia
by visiting East River Bank online.
East River Bank provides personal banking and business
banking services in addition to small business loans.