Getting an SBA loan is not an easy task, we all know. It is a little like winning the biggest stuffed animal at the carnival. Odds are against you, but sometimes it does happen, writes Geoff Williams in his article in AOL small business. He spoke with Christine Reilly, the president of Small Business Lending for CIT, who said about a year ago the federal government tinkered with the formula for getting an SBA loan and for a brief moment the loans were semi easy to get. The SBA guaranteed 90 cents on the dollar instead of 75 cents and waived the borrower’s fees (about 3% of the loan). SBA lending jumped until the 90 cents guarantee ended in May. In June lending has dropped a whopping 74%.

Here are some things you need to know before you apply for a loan:

- Learn about the loans – There are a few SBA loans, applying for the correct one will give you a better chance of getting the loan.
The 7(a) loans are the most popular. Within it there are four types of loans:
The Express loan – Aimed at getting your loan as fast as possible
Export Loan Program – for businesses that export their products.
Rural Lender Advantage Program – designed for businesses in small communities, away from big city areas.
Special Purpose Loan Programs – designed for businesses that were affected by NAFTA.

There are also loans called 8(a) which are aimed at ‘Socially Disadvantaged Individuals’.
SBA 504 loans are another type of loans for real estate or infrastructure such as buying land or expending your building.

- Prepare The Documents – It’s not enough to ask for a loan and bring some papers to back up a request. John Martinka, Vice-President of  Partners, a Kirkland, Washington company, suggests his clients prepare a “book” about the company and the individuals involved. It can be a 10 tab divider with business and personal financial statements, tax returns, accounts receivable, accounts payable, a business plan, reference letters and whatever else is related to the business or the loan. Bankers see many applications, the well-organized ones gives them an idea of how you run your business and how in tune you are to details. Tell a good story about you and your business.

- Collateral – SBA requires that the lender put up all available collateral, including home equity, against the loan. Your business might have some assets that can guarantee the loan.

- Risk factors – Even if you think you have the uncanny ability to turn tin into gold, don’t brag about it to the bank. Traditional lenders hate risk and it’s not the best environment to go way outside your core business.

Image thanks to http://www.flickr.com/photos/42179515@N06/3908285404/