It’s a tough world out there for small businesses, which is why organizations and programs that encourage their growth are much appreciated. In this article, we’ll give you the rundown on one such organization — the U.S. Small Business Administration, or the SBA. It can be a good source of funding for roofers, so be sure to read on.
What Is the SBA?
The SBA is a federal agency created in 1953 dedicated to helping small businesses. It helps small business owners and entrepreneurs with everything from planning, launching, managing, and growing their businesses. Regardless of what you require, be it funding, business advice, or contracting expertise, the SBA has the resources to help.
While its wide range of services is undoubtedly helpful, we’ll be focusing on SBA for commercial roofers — how to receive funding and assistance for growing your business.
Can You Use SBA Loans as Funding for Commercial Roofers?
If you’ve been digging deep in your pockets and hurting for cash, you might be surprised to find that there are many options for funding for roofers. Among them are bank loans, cash advances, lines of credit, and of course, SBA loans.
Bank loans are often the first choice people think of when they need funding. However, securing a bank loan is typically difficult for small businesses. This is what makes SBA loans convenient for roofers. Their loans still offer bank-rate financing, but with requirements that accommodate some of the asset and credit-related risks associated with small business loans. The SBA offers incentives to encourage small business lenders to provide loans to candidates that would not have qualified normally. It does this by guaranteeing (i.e. promising to pay if the borrower defaults) up to 85% of the loans, so the lenders face minimal risk. Just keep in mind that even though applying for an SBA loan is easier, that doesn’t mean it’s easy — you should still be prepared for a lengthy application process.
While this article is primarily geared towards commercial roofers, that doesn’t mean they’re the only ones that benefit from SBA. If you’re a residential roofer interested in getting into commercial roofing, this is also a great opportunity for you. Getting the required funding to expand your business can be an overwhelming uphill battle, but with SBA for roofers, you can start breathing easier.
General SBA Funding Process
The processes for funding a new business or getting funding for an existing business are relatively similar. Here’s a general overview:
Determine How Much Funding You Need
Before you can even think about requesting money, you first need to know how much you’ll be asking for. The SBA offers this calculation guide for new businesses, but you might also learn something new as an existing business.
Get a Hold of the Right Documents
If you want people to invest in your roofing business, you need to convince them that it’s a good idea.
First, you’ll want to update your business plan and create a short business case. You’ll need to write down the total requested amount and the reason(s) why you are asking for that amount. Is it for roofing materials and resources? Are you creating new technology? Do you need help with providing a fair wage for your employees? Try to be as specific as you can.
Afterward, you need to prepare financial statements. Ideally, your statements will show that your business has been doing well and is thus a good candidate. If your growth is following a downward trend, however, all hope isn’t lost — you just need to explain clearly how the funding you’re requesting will improve your business.
Other documents you can use to support your application are credit reports, tax returns, internal financial reports, a business valuation, and a business forecast. It’s good to have a well-documented financial history. This helps convince lenders and investors that you’ll put the funding to good use.
Figure Out Your Funding Source
You have several options for funding sources with SBA, namely credit, loans, and crowdfunding. For roofers, you’ll likely be looking at the first two. SBA offers the Lender Match tool to help you find lenders that offer SBA-guaranteed loans. It works by matching you up online with potential lenders for your loan, based on the information you provide about your business. Afterward, you can discuss with lenders and apply for a business loan as normal.
If you can’t find a lender you want to work with, you can try alternative options, such as selling ownership shares of your business. The feasibility of this may depend on your partnership agreements, your business structure, and state law.
Lastly, SBA also offers some programs for federal contracting opportunities that you may qualify for.
Specific SBA Programs To Take Note Of
- 8(a) Business Development program — A program that allows small businesses owned by “socially and economically disadvantaged individuals” to compete for federal contracts and receive development assistance and mentorship.
- Veteran assistance programs — Geared towards helping veteran-owned small businesses compete for federal contracts and opportunities to purchase surplus government property
- Community grants — A range of programs and partners that offer grants for COVID-19 relief, veteran-owned businesses, small business innovation, and more.
Where Can I Get More Assistance?
Navigating government programs can be confusing at times. Fortunately, the SBA readily offers further help on its website. You can try searching for local assistance and connect with someone from the SBA and their network of partners for free for low-cost counseling and training. You can also visit their website’s contact page for alternative means. Don’t get intimidated by the process — you can always work towards funding your commercial roofing business one step at a time.
Who Are We?
Castagra is a roof coating manufacturer dedicated to providing sustainable and high-performance coating solutions. Learn more about our products here, or contact our team today to learn more about what we do and how we can help you!