The amount of income you will need for a startup loan is going to depend on how much your loan amount is and if you have filed a business tax return.
A startup that does not have any business revenue can still be approved for a loan. They will just need to show two things:
A startup that has already filed a tax return will also need to show:
This is why it is very important for businesses who want SBA funding to show a profit on their most recent tax return. Your business must be profitable in order to receive SBA funding. No one wants to give you a loan when your business is losing money. SBA loans are meant to help you grow your business not get you out of the hole.
When you are an existing business almost everything is reliant upon your historical cash- flow, meaning how much money your business has made and retained over the last 3 years. If you are a new business with less than 2 years of tax returns, then your financial projections (how much money your business is going to make) will also matter greatly.
Here is a breakdown of what any startup will need to qualify for a $50k loan.
When you are borrowing money for your business, the most important thing is making sure your business is able to pay back the money. Either your business has tax returns that show it can pay back the SBA loan or you will need projections to show how you can pay the money back. Secondly, your current income has to be able to cover your personal expenses.
Additionally, in order to get approved for the SBA loan you will also be required to put an equity injection into your own business. Your equity injection will be 5-20% of your projection cost. This more than your income will determine how big of an SBA loan you can be approved for.
To discuss your specific situation and how much you can be approved for in an SBA working capital loan for your business, request your free consult below.
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