The article below gives steps to help determine
if a SBA loan is right for you.
Is
A SBA Loan Right For You?
Are you in the process of starting a small
business? Are you in search of a lender who has the knowledge
to help you obtain the type of loan that's right for
you? If so, consider applying for a SBA loan, today.
The Small Business Administration (SBA)
has been helping small business owners with funding requests
since 1953. This independent government agency offers
three types of loans, and is responsible for creating
and maintaining guidelines for each.
The actual funds come from a variety of
lenders who have agreed to follow SBA guidelines when
providing business loans. In return, the same lenders
receive a government guarantee that these debts will
be repaid, in a timely manner.
The most common SBA loan program is the
Basic 7(a) Loan Guaranty. There are numerous variations
of this loan, created to serve a wider range of small
business applicants. This type of loan is available to
both new businesses and those already in existence. It
is the easiest to obtain, due to very flexible terms.
It is considered a commercial loan.
This SBA program has assisted thousands
of small business owners obtain loans, even after being
turned down by other banks and lending institutions.
Borrowed monies from the Basic 7(a) Loan can be used
for many things such as land, buildings, equipment, improvements,
furniture, working capital and
more.
Small businesses must meet certain requirements
in order to be approved for a SBA loan, of any kind.
Lenders only show interest in those businesses meeting
specific criteria. Factors include business size, business
type, the ability to obtain funding from additional sources,
the means to repay loan and the fact that the business
is a "for profit" business.
There are fees and prepayment penalties
associated with SBA loans. As a rule, they are somewhat
lower than traditional loans.
