SBA 504 Application Do’s and Don’t’s

May 28, 2021

You were looking for financing for your business and came across the SBA 504 loan program.

You visited with your banker and the Certified Development Corporation (CDC, like Dakota Business Lending) about the details and are ready to start the application process. You pulled up the application on your computer and, at first glance, you already feel overwhelmed. “Where do I even begin?!”

Do not start worrying too soon! While the SBA 504 loan application may look a little overwhelming at first, you will soon learn that this document is not as bad as it seems. Our team has witnessed hundreds of entrepreneurs and small businesses owners who were once in your shoes tackle this document and progress their way towards acquiring financing. While working with these business owners, we have also compiled a list some helpful “do’s and don’t’s” that we have learned along the way to help make this process smoother and less overwhelming. Here is just a few we would like to share with you.

CLICK HERE FOR DO'S

CLICK HERE FOR DON'T'S

DO:

  • Include Dakota Business Lending as early in the process as possible. The application is a TEAM effort, and your Dakota Business Lending loan officer will be the one helping you create your loan application and take your business to the next level. The earlier we are involved, the better!
  • Include SBA/Dakota Business Lending as the intended user on the appraisal
  • Let Dakota Business Lending and your bank know of your timeline and wishes for the project
  • Verify any owner or guarantor over 20% for both real estate holding company and operating company is willing to provide personal financial information
  • Disclose any prior bankruptcies, pending lawsuits, prior misdemeanors/felonies (even if dropped or expunged from your record)
  • Provide information about other companies that you have ownership in (possible affiliates)
  • Share information about any franchise, dealing, licensing, or other types of agreements that you have for your business
  • If you are buying an existing business, be sure you able to obtain 2 years tax returns and current financial information from the seller
  • Have an initial kick off meeting with both Dakota Business Lending and your bank to make sure everyone is on the same page. We will then do the hard work of guiding your through the application and assisting you with forms as much as possible.
  • Get excited about the amazing financing package structured specific for YOUR BUSINESS!

These are just a few suggestions we have to make your SBA 504 loan application process as easy as possible. The most important thing you can do is be as thorough as possible and reach out if you have any questions. Keep moving forward, one step at a time, and you will be well on your way to getting the financing you need for your business project!

For a more detailed application guide with tips and tricks for your SBA 504 loan application, click here. As always, contact the loan officer in your area with any questions or for any additional guidance.