It is highly unlikely. Personal and business credit cards are eligible, but most lenders will not want to touch that debt since it is so easy to use them and get right back into debt.

Yes, you can! Banks do prefer franchises and even more so acquisitions, but a mom & pop startup can get approved.

Unfortunately SBA loans are not meant for investment opportunities including real estate. You can't buy residential real estate only commercial with an SBA loan. The 504 and 7(a) loan both require that the property be used for your own business. You will need to occupy at least 51% of the property. The rest can be rented out to tenants.

This will depend on the type of business you are looking to open. Most banks will require at least 10% down for existing businesses or franchises and 10% to 30% down for most startups. Keep in mind, banks will want to be sure you still have significant cash reserves (think 3-6 months expenses) left over after your investment into the business, so you’ll want to factor that into your calculation.​ If you are an existing business with at least 2 years business tax return, then the loan amount will be based on your businesses ability to service the debt called your Debt Service Coverage Ratio or DSCR.

There are many factors that determine how long the SBA process takes. Business type (start up vs existing business), finding a location, lender underwriting time, are all factors that will play into the overall timeline. It is also heavily dependent upon your ability to complete the requirements and documentation for the bank. Most startups generally take 60-90 days and most existing businesses take around 45-60 days, but these timelines can be much faster or much slower dependent on the factors we called out above.

The SBA has a minimum down payment requirement of 10% of the total project, but this is a floor not a ceiling. Each bank will have their own internal guidelines for how much of the deal they are willing to finance, and therefore how much you will need to bring in as your down payment. While it is possible to put only 10% down, some lenders will require more in order to mitigate their risk. There are also circumstances, especially with an existing growing business where the deposit can be much less than 10%.

In most cases, the answer is yes! If you plan to use a Rollover for Business Startup (ROBS) as your Equity Injection, you will want to verify that the lender you are working with has a good understanding of the ROBS structure. Your ROBS provider can always help in this education process. If you don’t want to use ROBS, taking a distribution or potentially even a 401(k) loan may also be an option, though you will need to factor in taxes and debt repayment.

In order to participate in the lending program, the SBA requires that banks underwrite the loans as if there was no government backing. This means they want the lenders to use the same collateral requirements on an SBA loan as they would a non-SBA loan. While it does provide the bank with extra security, the government backing from the SBA cannot be used as collateral. In some cases the bank may not require collateral for the loan, but per SBA requirements, if there is any collateral, the bank is required to take it up to the amount that fully secures the loan.

SBA will allow you to bring a collateral guarantor to the loan. This person would normally a close friend or family member. They are not required to be added to the company as an officer and are not signing as guarantor on the loan. They are only signing to allow the SBA to use their home or property's equity as collateral if required.

The SBA minimum is 640, but most lenders prefer to see credit scores closer to 690+. More so than just your score, lenders are interested in your credit history and current debt obligations. High amounts of credit card debt or recent late payments are items that lenders will factor into their lending decision. Previous bankruptcy, foreclosure, or short sales are also all items that lenders will want to be disclosed along with an explanation letter to help understand the circumstances.

Yes, a business plan is one of the required documents for an SBA loan application. A business plan is a great exercise for you as a business owner as well as the most helpful tool for a lender when evaluating your loan application.