Let’s Learn About Loans – Small Business Style

If you run a small business, you’ve probably found yourself in need of additional funds at some point. Whether that was when you were first starting off and needed the money to get some real estate, or after you’d made some headway and were looking to expand, it probably took a good amount of time to figure out how and where that money was going to come from. Maybe you’d heard of SBA loans, but just didn’t know how they could help you. That’s about to change.

The Basics

SBA loans are sponsored by the U.S. Small Business Administration, which works with various banks and lenders nationally to ensure a portion of each loan so that the banks and lenders are risking less by lending to an entrepreneur. There are multiple types of these loans, but they all share a few hallmarks.

  1. Fewer Limitations for Use of Funds
  2. Longer Repayment Periods
  3. Lower Interest Rates
  4. Better Availability of Funds
  5. Educational Resources Provided by the SBA
  6. Smaller Down Payments

The Catch

Now, with all of that said, it seems like a no-brainer: get yourself an SBA loan. However, there are some things you need to consider. It can be hard to get one. The application process itself includes a lot of paperwork that needs to be filled out precisely, and your business needs to meet some requirements including being U.S.-based and for-profit; the SBA will also want to see that you’ve invested your own time and/or money as well. Most successful applicants also have a minimum credit score around 620, and annual revenue of at least $100,000.  

How to Proceed

If you think your business could benefit from an SBA loan, it’s a good idea to do some further research. This type of funding comes in multiple different packages, and each has its own specific benefits and best applications. Think about what your business needs now, and the best way to obtain it. Once you’ve identified where the money will go, it’s a good idea to seek out an expert. There are plenty of people and firms who are happy to help you identify which loan type will work best for you and can help guide you through the process of applying. As with most things related to small businesses and entrepreneurship, it’s worth it to take your time and make sure you get the right support you need to thrive.

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