Submitting documents to SBA

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If you’re submitting documents to the SBA, you’ll  need to do it the RIGHT way to ensure a smooth process! Here’s our advice (based on Trevor processing loans for over 30 years) on the best way to submit documents:

1. PDF ONLY. No photos, no other file types. With the volume of documents and applications they’re working on, SBA Loan Officers simply do not have the time to convert your documents to PDF. They’ll probably set it aside until they have time.

2. Separate PDFs for separate documents. A PDF of a voided check should be separate from a PDF of a photo ID and etc. When SBA has to separate your documents from a single PDF it slows down your entire process.

3. Label the PDF on your end. For example of a labelled PDF: “COMPANY NAME YTD Income Statement JAN 1 to SEP 30 2020” or “COMPANY NAME Voided Check”

4. List the documents you’re submitting in the body of the email. For example, SUBJECT LINE: “Company Name: Documents submitted DATE”. Then, in the body of the email: “Attached to this email: YTD Income Statement JAN 1 to SEP 30 2020, Voided Check, Photo ID”

5. We recommend using the NOTES App on your iPhone to scan documents. Ridiculously easy.

6. BEST Scanning app of all: “ADOBE Scan” which you can download to your smartphone from your respective app store.

7. When scanning with your smartphone, keep the document within the scanning borders. Most often the scanning app will give you a highlighted “border” for the document.

8. Always scan documents on a flat surface and scan straight, not slightly tilted.

Watch our WTF Wednesday video where we discuss why these are important.

Schedule a FREE 15 minute call to review any complications you’re having with your disaster loans.

Board Resolution Sample Wording & FAQs on Hazard Insurance

When your EIDL loan has been approved and you've accepted it, you will be contacted by the SBA for a Board Resolution Letter and/or Hazard Insurance. We've compiled information and sample wording to comply with these requirement. GET IT HERE.

Summarize your Finance Package

Summarizing your finance package can help to prioritize how your banker reviews your financing request.

We recently submitted a client’s financing request to one of the Lenders on our lending matrix.  Our Lender Rep. said, “Holy cow, you guys are on top of it with your summary. Not many brokers make it this easy to review the package.”

We made it easy because the client provided us with their financials. The financials were comprehensive. It’s a multi-million dollar corporation and we’re at the early stage of presenting to the lender. We want to show something that’s easily digestible. We want to ease  the process for the lender to give us a prompt review and tell us their interest in offering the financing.

Summarizing your financials is easy to do.  When you have a lot of line items that lead up to one type of deduction or one type of income source, simply summarize it. Drop it down to as few lines as possible so the lender can do a quick review and say,  “Okay, I see the picture here.”

The Lender doesn’t need to know the granular line-by-line details at this early stage; you want the Lender to give a fast review to gauge their interest. If the Lender expresses interest and offers a Letter of Intent for the financing, you can present the more detailed financials with your full loan application package.

For each client financing request, we write a summary statement. We present a one or two page statement describing some background on the business, the reason for their financing request, and, in bold, large font, the amount of our financing request.

Our presentation package for the initial Lender review is compact, yet complete.  The “first glimpse” by a Lender is sufficient to tell us if that particular Lender is the right fit for our client’s request, or if we need to locate a different Lender.

If you’d like a copy of our Documents Checklist, click HERE.

If you have questions on the best way to present your financing request to a Lender, email us at Curious@AuroraConsulting.biz and we’ll be happy to provide advice.

The Dreadful Disorganized Document Disaster

Our resident Chief Financing Rock Star, Trevor Curran, was a Mortgage Banker for 30 years. His specialty was helping first time homebuyers with low down payments to achieve the American Dream of Home Ownership.

From the early days, with no computers, no internet, no email nor a beeper on his belt—until the day of his retirement in 2018, a mortgage loan application was all about the paper. Documents to support the application needed to be submitted, reviewed, dissected, parsed, and collated.

Trevor’s clients submitted their documents in many and varied ways, including coffee-stained tax returns, crumpled paystubs pulled out of an old wallet, and badly-scanned PDFs.

Considerable time was spent by Trevor and his loan processing team to put these documents into a manner acceptable for review by an Underwriter.

And of course there was the pushback from clients.
“Why do you need that (document)?”
“I can’t find my tax return.”
“The dog ate my homework.” Oh, wait, wrong story.

Trevor’s response, time and time again, including in the early days when he would literally drive to the clients’ home, workplace, a McDonald’s parking lot, or the real estate office, to pickup their required documents, was, “We need these documents because the bank requires it since you’re asking the bank to lend you several hundred thousand dollars.”

This obvious message was delivered in a kind and patient but firm manner.

Still, it always seemed incredible, time and time again, how people could be so cavalier about their loan application requirements. “Don’t they want the house?” he would often ponder in the moments of extreme frustration.

Now, as the primary processor for Aurora Consulting, Trevor’s manages the document flow and the loan applications for our business clients. When we launched this business we remember discussing how this document issue is going to be so much better because we’re dealing with serious business people.

Unfortunately, we were mistaken.

Especially over the past eight weeks as we have assisted over 30 businesses to apply for and receive Government Disaster Relief financing, the poor quality of document management is mind-blowing. Especially at a time like this, when the desperation of keeping a business alive requires this emergency infusion of cash. You’d think business owners and their representatives (CPA’s, mostly) would be sharper than ever to get documents submitted in an organized and prompt fashion.

Again, mistaken.

Moral of the story for anyone thinking they want to ask a Bank or Lender for money—whether you’re buying a house or financing a business—it’s all about the paper. Organize your documents, submit them in a clean, efficient manner, and submit them promptly.

Rant over.

Send us a message with how you’ve successfully managed your team to understand your high level of standard when it comes to managing your documents.

The Lender Reviews Everything

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When you apply for financing and your tax returns and/or personal financial statement shows that you have interests in other businesses or property, the lender will want to review the financials on those other businesses.

When it comes down to it, the Lender has the right to ask for this information.

The question from our client is often, “Why is this germane to my financing request for my business?  That other business has nothing to do with the business I’m financing.”

While this may be true, remember that you’re asking the lender to assess the risk of lending money to you and to your business (the one on the application), and if there are negative aspects to your other businesses that affect the financial health of this business, the lender wants to assess that risk.

The good news is that you can control the narrative to an extent. Describe what the other business is via a summary statement and how it interacts with the business you are financing.  Especially with regards to debt.

There’s nothing wrong with full disclosure.  Get it out of the way upfront. Don’t wait for the Lender to ask for it.

Understand why the Lender wants that information instead of fighting the request.

The Lender has the right to ask these questions.  Pushing back is okay, as long as you do so in a gentle fashion.  In the end, it’s about achieving your goal of obtaining the financing you need to grow your business with the least muss and fuss as possible.

Contact with questions about the most important documents to have in order at all times. Solutions@AuroraConsulting.biz.

It Can Happen That Fast

We’re famous here at Aurora Consulting for the phrase, “Growth sneaks up on you!”  We’ve written a blog about it and have done a few videos where this notion comes into focus as the reason we are doing the video in the first place.

Even the best-prepared, most-organized, super-efficient Business Owner can find themselves with a new client who’s blowing up the revenue to extraordinary levels, or new orders for products and services that far exceed previous orders and expectations.

We like to say, “One Vehicle leads to 20 Vehicles.”
It can happen that fast.

We believe in your business success story.  You are putting in the effort every single day to grow your revenue and live the business life of your dreams.  That’s why we also believe that your financial services relationships today are so vital to your business growth tomorrow.

Begin with your Banker relationship.  It’s not enough that you know your Business Banker’s cell number; she has to answer it when you need her.   It’s not enough that she promises to get it done; RESULTS are the only thing worth talking about.   

Both these items are great metrics to help you understand if your Business Banker puts as much value in your relationship as you do.   If your Banker is meeting these basic standards, then you’re in good hands.  If not, then you should reconsider your banking relationships.

Along the lines of your relationships is thinking about future credit financing. We heartily recommend you invest some time at least once a year, if not more often, to sit down with your Business Banker and review your business’ financials.  You want to know if you are positioning yourself in the most favorable way possible to apply and be approved for credit financing when you need to grow from ONE vehicle to 20 vehicles.

Some Business Owners fear exposing their financials to their Banker.  Maybe the fear surrounds the Banker questioning the Bank’s commitment to your relationship.   We have found the opposite to be true for one reason.  

Your Banker’s commitment to you is driven by the motivation to maintain and grow your banking relationships with the Bank.  When we say relationships, we mean bank accounts.  Bankers are driven to grow depository relationships.  That’s their goal.  And once they have your business, they want to grow it and make sure you stay with them.

Reviewing your financials with your Banker can only further the Bank’s confidence in you and your business.  And it may provide you with cogent advice and knowledge that will help you prepare for that moment when you need 19 more vehicles.

At Aurora Consulting, we are Brokers. We work for you, not for the Bank.  And we know the tolerances that Lenders have for financing businesses on a growth trajectory.  

We understand the Underwriting guidelines and how your business financials fit into those “boxes” at different Banking institutions. We’re happy to review your financials too and prepare you for the eventuality you’ll need credit financing for more vehicles.

Email us at Curious@AuroraConsulting.biz to chat more about how you can proactively position yourself for future financing.