Build Your Foundation First

Updated: Feb 5

Like every strong building needs a solid foundation, so does an SBA loan.  I’ve lost count of the number of times someone has asked me to approve a loan based on debt service numbers before I’ve seen the Use of Proceeds – the Foundation.  A poorly built foundation results in numerous and long-term structural issues to a building.  A poorly structured loan leads to early delinquencies and possible repairs or denials to your guaranty.  Build your foundation with the right materials:


1. Understand the whole project to determine the financial needs or the applicant

2. Determine how much has already been spent by the applicant

3. Determine how much more needs to be spent before closing

4. Determine the sources of all funds into a deal

5. Now, build your foundation


I worked bridge construction with my father for a number of years.  When I spent too much time on something that wasn’t material he’d say “We’re not building a church!”  He never said that when we were working on the foundation and for that a lot of Northern Michigan drivers are thankful. Want to learn more about building the foundation of your SBA loan? Join us on Wednesday, February 12, 2020 at 1 PM EST for our Loan Structuring RLS Interactive Training.

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