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While the standards for SBA-qualifying loans are more flexible than those for other types of loans, lenders should still require extensive documentation to evaluate loan requests.

There are many different formats to use for a loan proposal. Lenders may need to consult with borrowers to determine which format is best for them. Lenders should look for industry-specific details to properly understand how the borrower’s business is run and what industry trends affect it.

In addition to consulting the information in this section, you can take a free online course on How to Prepare a Loan Package.

SBA Forms

The loan application must include certain SBA Forms. The primary forms for the Basic 7(a) program include:

  • Form 4: Application for Business Loan
  • Form 4-a: Schedule of Collateral – Schedule A
  • Form 413: Personal Financial Statement
  • Form 912: Statement of Personal History
  • Form 1624: Certification Regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion Lower Tier Covered Transactions
  • Form 1846: Statement Regarding Lobbying

Loan Documents

Most lenders include the following elements. Additional specific requirements may be added by individual lenders.

Executive Summary

The borrower should begin the proposal with a simple and direct cover letter or executive summary. This should clearly and briefly explain who they are, their business background, the nature of their business, the amount and purpose of their loan request, their requested terms of repayment, how the funds will benefit their business, and how they will repay the loan.

Business Profile

The borrower should provide a written description of the history of their business, including:

  • Type of business
  • Location
  • Product or service
  • Brief history (including length of time in business and ownership)
  • Annual sales
  • Number of employees
  • Proposed future operation
  • Competition
  • Customers
  • Suppliers
  • Date of information

Management Experience

Include resumes of each owner and key member of management.

Loan Request: SBA Form 4

This description of how the loan funds will be used should include purpose, amount and type of loan.

Loan Repayment

A brief statement indicating how the loan will be repaid, including repayment sources and time requirements. Cash-flow schedules, budgets, and other appropriate information should support this statement.

Collateral: SBA Form 4-a

List real property and other assets to be held as collateral. Few financial institutions will provide non-collateral-based loans. All loans should have at least two identifiable sources of repayment. The first source is ordinarily cash flow generated from profitable operations of the business. The second source is usually collateral pledged to secure the loan.

Personal Financial Statement: SBA Form 413

SBA requires financial statements for all owners, partners, officers and stockholders owning 20 percent or more of the business. These statements (listing all personal assets, liabilities and monthly payments) should not be more than 90 days old. Federal income tax returns for the past three years must also be submitted.

Business Financial Statements

Borrowers should provide complete financial statements for the last three years (including balance sheets, income statements, and a reconciliation of net worth) plus a current (no more than 90 days old) interim financial statement. They should also include a schedule of term debt and aging of accounts payable and accounts receivable (broken into 30-, 60-, 90-, and past-90-day-old categories). If they are just starting out, provide a projected balance sheet and income statement. The strength and accuracy of their financial statements will be the primary basis for the lending decision. (Formats for constructing a balance sheet, income statement, and cash flow statement can be found in Forms.)

Proposed Business

The borrower should provide a pro-forma balance sheet reflecting sources and uses of both equity and borrowed funds.


The borrower should provide a projection of future operations for at least one year or until positive cash flow can be shown. Include earnings, expenses, and reasoning for these estimates. The projections should be in profit and loss format. The borrower should explain the assumptions they use if they are different from trend or industry standards and support your projected figures with clear, documentable explanations.

Other Items (as They Apply)

  • Lease (copies of proposal)
  • Franchise agreement
  • Purchase agreement
  • Articles of incorporation
  • Plans, specifications
  • Copies of licenses
  • Letters of reference
  • Letters of intent
  • Contracts
  • Partnership agreement

If you have any questions or need any further information, contact the SBA District Office nearest you.

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