Ready to grow? An SBA loan may help.

A common challenge for small and mid-size business owners is obtaining the cash they need to help grow their businesses. You may need a new space or new equipment to take your business to the next level, but may find that the lending guidelines for traditional commercial loans are too restrictive — especially as your business continues to recover from the recession.

Small Business Administration (SBA) loans can provide a good solution for many California businesses. SBA loans generally offer more favorable terms. For example, you only need 10 percent down to purchase real estate, and you can roll fees into the loan balance. SBA loans feature higher loan-to-value ratios, longer repayment periods and no balloon payments. Companies often qualify for higher loan amounts because of extended payback periods, and need less cash flow to service the debt.

SBA eases eligibility

Effective April 21, 2014, the Small Business Administration put new rules into effect for both its 7(a) and 504 loan programs. Now, more businesses may qualify for SBA financing through these two popular loan programs. The new rules mean borrowers no longer have to meet a "personal resources test" that required the injection of personal liquid assets into a business.

• The SBA 7(a) loan program can be used to finance a variety of business purposes
• The CDC/504 loan program provides financing for major fixed assets

5 tips to land a loan

Loan approval hinges on an accurate, thorough proposal, so take your time and seek expert advice. The following tips can help, too.

1. Use these checklists from the SBA to gather all the documentation you will need to apply for an SBA CDC/504 real estate or equipment loan or an SBA 7(a) loan.

2. Be ready to tell your banker the story behind your numbers. Be sure your business plan includes details about the business, management plans, industry history and trends, potential competitors and financial projections. Explain how you’ve overcome business challenges in the past, and share specifics about how you'll use the SBA loan to grow your business.

3. Analyze your competitors and identify your company’s strengths and differentiators. A solid analysis can strengthen your proposal and help your business succeed in the long run.

4. Help your banker understand your customers by including links to your company’s website, LinkedIn page or Facebook page in your proposal.>

5. Accelerate the process by selecting an approved SBA Preferred Lender who can approve loans without submitting the entire package to the SBA.

Learn more about SBA 504 and 7(a) loan program enhancements or find an SBA Specialist near you at California Bank & Trust, an SBA Preferred Lender. Loans subject to credit approval. Terms and conditions apply; see bank for details.