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5 Steps to Financing Your Next Journey
Accessing Resources for the Future
You’re ready to open a small business, or grow the one you already have. This great opportunity takes patience, perseverance, and some extra cash.
Follow these steps to improve your odds of getting the financing you need – and accessing resources that will help you plan for the future.
Step #1: Find Your Lender
Make sure you work with a Preferred Lender (PLP). Lenders with extensive experience are granted PLP status by the U.S. Small Business Administration (SBA) and are able to make their own credit decisions, which expedites the approval process. PNC is a PLP Lender.
Step #2: Know Your Loan Options
Being a Veteran-Owned Small Business has a lot of advantages, like better loan terms and waived fees. But you’ll want an expert to clearly explain the details and guide you through the application process. Your lender can also help you decide which of several loan options is best for you. Here are some of the choices.
SBA Loans*
The three main SBA loan programs are SBA 7(a), SBA Express, and SBA 504. You can work with a banker to determine which loan makes sense for your business situation.
*SBA loans are typically for small organizations that have been in business for at least two years, unless the owner can provide a very strong business plan at start-up.
SBA 7(a)
- For loan amounts up to $5,000,000.
- Used for most business financing needs, including business expansion, acquisition or startup; partner buy-out; permanent working capital; franchise financing; commercial real estate purchases, building renovations, construction and improvements; equipment, inventory or fixtures; and refinance of existing debt.
SBA Express
- For loan amounts up to $350,000.
- For all SBA Express loans to Veteran-Owned Small Businesses, the upfront guaranty fee is 0%.
- Used for most business purposes including business expansion, acquisition or startup; permanent working capital; franchise financing; real estate purchases; equipment; or inventory.
SBA 504
- For loan amounts up to $12,500,000 ($5,000,000 maximum on the SBA portion of the loan, or 40% of the total loan project).
- Used to finance larger projects, including commercial real estate purchases, building renovations, heavy equipment and machinery. Can also be used to refinance large fixed-asset conventional debt.
SBA Veteran Qualifications
The SBA Veterans Advantage (non-SBA Express loans) provides qualified veterans with a 50% upfront guarantee fee discount compared to non-veteran owned businesses. The guarantee fee is based on the term and the guaranteed loan amount.
Businesses must be at least 51% owned and controlled by an and SBA Form 413). individual or individuals that meet the following qualifications:
- Veterans (other than dishonorably discharged)
- Service-Disabled Veterans
- Active duty military participating in the Transition Assistance Program (TAP)
- Reservists and National Guard members
- Current spouse of any veteran, active duty servicemember, or any reservist or National Guard member
| FOR TERMS GREATER THAN 12 MONTHS | |
| $125,001 - $150,000 | 1% upfront guarantee fee |
| $150,001 - $350,000 | 1.5% upfront guarantee fee |
| $350,001 -$750,000 | Identify what you have and what you need to get started 3% of the guaranteed portion There are many special loans with lower rates and/or waived fees for veterans. |
| $750,001 - $5,000,000 | 3.5% of the guaranteed portion up to $1,000,000 plus 3.75% of the guaranteed portion over $1,000,000 Know where you stand both professionally and personally |
| FOR TERMS LESS THAN 12 MONTHS | |
| $125,001 - $350,000 | 0.125% of the guaranteed portion |
| $350,001 - $5,000,000 | 0.25% of the guaranteed portion |
Step #3: Prepare for the Loan Process
Having these items handy will help a lender determine if your loan is eligible for SBA financing and guide you to the loan choice that makes the most sense for your business.
Before meeting with a Business Banker, gather these documents:
- Business plan, including an overview of your business and market, your managerial experience and how you intend to use the loan
- Three years of recent business tax returns (if applicable)
- Three years of financial statements (if applicable)
During the application process, you will be asked to provide additional documentation and to complete some SBA forms, as listed below. In cases of a franchise purchase, construction or business acquisition, additional paperwork may be requested.
- Business financial statements, including a P&L statement current within 90 days of your application (if applicable)
- One year of business projections
- A list of ownership and affiliations
- Business certificate and license
- Past loan application history
- Most recent business income tax return and most recent three years of personal income tax returns (if applicable)
- Resumes for each principal of the business (20% or more ownership)
- Business lease or correspondence from your landlord
- SBA Form 1919
- Personal history and financial statement (SBA Form 912 and SBA Form 413)
Step #4: Research Your Resources
Your Business Banker and the SBA website are great resources as you begin this process. There are also several entrepreneurial organizations that can help – check them out at sba.gov.
Office of Veterans Business Development
This agency helps veterans and their families access various small business programs offered through the federal government.
Boots to Business
As part of the Department of Defense’s Transition Assistance Program (TAP), this SBA entrepreneurial education and training program helps transition active-duty military personnel to life as a civilian business owner. Participants explore business ownership and self-employment opportunities, learn about developing a business plan, and are introduced to SBA funding resources.
Veteran Women Igniting the Spirit of Entrepreneurship (V-WISE)
V-WISE helps female veterans turn their business ideas into reality through entrepreneurial training and networking.
Veterans’ Business Outreach Center (VBOC)
This is a cooperative effort between the SBA and 19 other organizations. It provides access to business training, counseling, mentoring, and referrals for veterans who already own or want to start a small business.
Step # 5: Register as a Veteran-Owned Small Business
Verified Veteran-Owned Small Businesses are given preferred consideration when bidding on government contracts or private-sector business. Get more information at va.gov/osdbu/verification/
Explore Borrowing Options Available from PNC[1]
PNC Business Bankers can look at your broad financial situation – from checking accounts to loan options – and everything beyond, suggesting a series of financial solutions that work for you. Stop in your nearest branch for more information on managing your business finances and to schedule time with a Business Banker.
Whether the flexibility of a Line of Credit will help you best prepare for the changing needs of your business, or you're looking for a Term Loan to provide a specific amount of credit to purchase assets or meet specific financing need, PNC has a variety of borrowing options to meet your needs.
Learn more about PNC Business Lines of Credit »
Learn more about PNC Business Term Loans »
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All loans and lines of credit subject to credit approval and require automatic payment deduction from a business checking account. Origination and annual fees may apply.
Bank deposit, treasury management, and lending products and services are provided by PNC Bank, National Association (N.A.), a wholly owned subsidiary of PNC and Member FDIC.
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