The criteria necessary to qualify for funding from the SBA loans programs are relatively lenient. SBA loans can’t be issued to prospective borrowers unless all the following minimum requirements are met:
- The business is physically located and operates in the U.S. or its territories
- The owner has invested equity in the business
- The business can’t qualify for funding by other means
- The 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 also should be aware that even though the SBA is guaranteeing a part of their loan, they will still be subjected to a lender’s full 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 any partners in the business.