SBA loans can’t be issued to prospective borrowers unless all the following minimum requirements are met:
- Business is physically located and operates in the U.S. or its territories
- Owner has invested equity in the business
- Business can’t qualify for funding by other means
- Business is a legal, for-profit enterprise
While the above requirements are fairly straightforward, applicants should be aware that the lending institutions you borrow from may make it more difficult to get approved.
Depending on the lender, you might find that you can’t apply with a FICO credit rating of less than 580. In other cases, the minimum credit score for applicants can be as high as 680.
Applicants should also be aware that even though the SBA guarantees a part of their loan, they will still be subjected to a lender’s underwriting process. In addition to personal credit checks, this will typically entail a formal review of a business plan, appraisal of collateral and background and credit checks for owners in the business.