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Over the past few months, we have shared posts on what a bank looks for when it comes to an SBA loan. We have discussed items such as cash flow, collateral, and credit scores. One of the things that often flies under the radar and is often missed, is your management team.
As a small business owner, you wear many hats and oversee many parts of your business – in fact you may be the only person your business employs. Other times, you may have a management team that helps your run your business. Regardless of how many employees you have or how big your management team is the SBA is going to want to know some background on those instrumental in running the business.
Having a management team with strong skills and experience in the industry is often something the SBA will take into account when they ask themselves, “what will happen if something happens to the owner?” Simply put, the SBA will want to make sure that you have the team in place to keep the business going – and the loan being repaid – in the event something happens to the business owner. When completing your SBA application considering this can often give you a leg up. If you have good talent then flaunt it!
Some small business may have only one person running the show or may be starting out and not have a big management team yet, but still want to apply for an SBA loan. Small business owners may be thinking to themselves: How will I show the SBA I am serious and how will this loan get repaid if something happens to me? In these situations, this is where insurance comes in. Often the SBA will ask for the owner of the business to carry life insurance or other forms of insurance to cover the loan in case something happens. In fact, having the right type of insurance in place can help get you closer to an SBA approval when the SBA asks for it.
While getting this insurance can sound daunting, it can really be quick and painless when working with a team that understands your needs. As a full-service bank, not only can we help with your SBA loan but we can assist with the insurance if that becomes a need.