An SBA loan is a loan that is backed by the government. A bank is much more likely to approve your loan request if it is guaranteed by the SBA. Here are a few tips for how to improve your chance of getting an SBA loan for your new business.

Get Your Credit Profile in Order

As you can imagine, one of the most important elements of a decision by the SBA on whether or not to back your loan is your credit profile. In most cases you’ll need a great credit history and score to get an approval. Before you apply for the loan, pay down your credit card accounts as much as possible. This will improve your credit utilization ratio and increase the chance of your score going up in the near future. Get caught up with any payments and avoid going over 30 days late with your debt accounts.

Spend Some Time on Your Business Plan

When you’re planning to apply for financial assistance from the SBA you really need to spend time crafting your business plan to perfection. Don’t just throw it together in a day – take some time to get market research, gather proof of your claims and hire an accountant to help you with the finances. Having a solid plan will improve your chances of getting a “yes” answer from the SBA and a small business lender.

Bring Something to the Table

When you apply for business financing, the bank and the SBA want to know that you’re personally invested in the company as well. There’s a slim chance that they’ll provide you with 100 percent financing — you need to come with cash savings and/or collateral to show them that you’re willing to risk some of your own assets for the sake of the business. Make some sacrifices and start putting some money away in advance of applying for an SBA loan.

If you intend to ask for an SBA loan approval to get your small business started, it’s a good idea to plan ahead. Use these tips to improve your chances of getting approved.