Last reviewed November 2026
Kennedy Sutherland LLP represents lenders. When the firm works on a loan, it represents only the bank, not the borrower or any guarantor. This page is general information, not legal advice to you. Please have your own lawyer review your loan documents and any guaranty before you sign.
Government guaranteed loans ask more of borrowers than many bank loans, but most of it is predictable. Gathering these items early is the surest way to keep a closing on schedule.
What your lender will ask for
- Business financial statements and federal tax returns, usually for three years, plus an interim statement. Lenders verify tax information directly with the IRS, so the returns must match what was filed.
- Personal financial statements and tax returns for each owner of 20% or more (SBA Form 413 or the lender's form for SBA loans).
- An ownership chart showing every owner, down to the individuals behind any entity or trust.
- Formation documents: certificate of formation, company agreement or bylaws, and any buy-sell agreement.
- A business plan and projections for start-ups, expansions and acquisitions.
- For real estate: the purchase contract, title commitment, survey, environmental information and, for construction, plans, budget and contractor information.
- For a business purchase: the purchase agreement, the seller's financial records, any seller note, and the valuation the lender orders.
- Business licenses and permits, leases and major contracts.
- For SBA loans, SBA Form 1919, the borrower information form.
Equity injection
Most government guaranteed loans require the borrower to put money into the project. For SBA 7(a) loans to start-ups and most business purchases, the minimum is 10% of project costs. SBA 504 projects need at least 10%, and 15% or 20% for new businesses or special purpose property. REAP loans need at least 25%. USDA B&I sets the requirement in its conditional commitment.
Lenders must prove where the money came from and where it went. Expect to show bank statements covering at least 30 days before the injection and the transfer itself. Gifts or borrowed funds may be allowed in some cases but need extra documentation, and borrowed equity may need to stand by.
Personal guaranties
Owners of 20% or more usually must personally guarantee an SBA loan in full. USDA B&I generally requires guaranties from 20% owners at least equal to their ownership share of the guaranteed amount. Spouses, trusts and holding companies may also need to sign, depending on how the business is owned. A personal guaranty puts personal assets at risk, so talk with your own advisors before you sign.
Insurance
- Hazard insurance on collateral, naming the lender.
- Flood insurance if any building is in a special flood hazard area.
- Life insurance on key owners in some cases, such as a business that depends on one owner and a loan that is not fully secured. Existing term policies can often be assigned.
- Liability, workers' compensation and any other coverage the lender requires.
Typical timeline
| Stage | What happens |
|---|---|
| Application | You deliver the document package; the lender underwrites and, where required, submits to SBA or USDA |
| Approval | The lender issues a commitment; SBA issues its authorization or USDA issues a conditional commitment |
| Third-party reports | Appraisal, environmental review, title, survey and business valuation are ordered |
| Closing | Documents are signed, equity is deposited and verified, and funds are disbursed |
| After closing | For 504 projects, the CDC loan closes after the project is complete; USDA issues its loan note guarantee after reviewing the closing |
Timing varies with the program, the lender's delegated authority, third-party reports and how quickly the borrower delivers documents.
More for borrowers
Download the borrower document checklist (PDF), and see the borrower FAQ for common questions.
This guide is general information for lenders and borrowers, not legal advice. Reading it does not create an attorney-client relationship. SBA, USDA and FSA rules change often, so confirm the current program requirements and the terms of your loan's authorization or commitment before relying on it. Kennedy Sutherland LLP is a private law firm. It is not affiliated with or endorsed by SBA, USDA or FSA.
Sources
- SBA SOP 50 10 8.1, Lender and Development Company Loan Programs (effective Oct. 1, 2026)
- SBA Form 1919, Borrower Information Form
- SBA Form 413, Personal Financial Statement
- SBA, 7(a) loans
- SBA, 504 loans
- 7 CFR 5001.204, personal, partnership and corporate guarantees
- USDA Rural Development, REAP guaranteed loans
Sources checked November 2026.