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Tips for applying for Utah SBA loans

Woman working at flower shop smilingA Small Business Administration (SBA) loan might be the right answer for business owners looking to expand, add a new location or develop a new service or product line. Applicants for Utah SBA loans can benefit from these federal loan guarantees, but they need to do a little homework before starting the process. They’ll also find it’s best to work with a lender who specializes in Utah SBA loans, knows the process and understands the local business environment best.

There are several types of Utah SBA loans, and each has different qualifications. Generally, though, SBA lends to start-up and existing businesses that don’t qualify for financing from other commercial sources.

Starting point

The first step is to visit commercial lenders to determine whether your small business might qualify for any of their lending programs. If not, visit the Small Business Administration’s Loans & Grants page to learn the basics of the program.

There are several different types of SBA loans for different types of business with varying needs for financing, prospects for growth and markets.

Know your lender

The Small Business Administration is an agency of the federal government whose function is to aid, counsel, assist and protect the interests of small business concerns. The SBA does not loan money to small businesses directly—instead, it sets standards and guidelines for loans and guarantees these loans will be repaid. This eliminates some of the risk for lenders.

As a business looking into Utah SBA loans, your next step is to find local lenders that participate in SBA programs and to choose one that can work with you.

Any business owner can tell you that your relationship with your banker is very important. You need to get to know your banker and help him or her understand your business, too.

Build a relationship

Show the lender that your business is a good risk—that it generates, or will generate, positive cash flow over time. Prove that you will be able to pay lenders, other creditors, suppliers and employees on time.

For your first meeting about Utah SBA loans, bring financial statements, tax returns and bank statements. Anticipate tough questions about fluctuations in cash flow, and be able to show that you can manage your total debt load—the current debt load plus additional repayment for the SBA loan.

Shop around

Don’t settle for the first lender you find. Look for a lender who specializes in Utah SBA loans. Big national banks often don’t offer the specialized, personalized service of a lender based in the state, whose associates are also locals.

A specialist in Utah SBA loans can structure loans to meet your needs. In addition, a local company can provide better business advice, drawing on knowledge of and experience with the local economy.

A smaller lender is also more likely to take the time to work with your business, and provide the flexibility needed to adapt to local circumstances.

So shop around. When looking for financing to expand your business or start a new one, do your homework, make sure you have a clear picture of your finances, check out the SBA website, and look for a local lender who knows the Utah SBA loan business, such as First Utah Bank.