SBA Loans for Small Businesses
If you are a small business owner, it is likely that at some stage of your company’s growth you will realize the need for outside financing. One option to consider is the acquisition of a loan from the U.S. Small Business Administration. Obtaining an SBA loan involves a considerable amount of time and paperwork, but businesses that might not be eligible for standard loans due to poor credit or insufficient collateral may still meet the requirements for an SBA loan.
To qualify, your company needs to be a legally registered for-profit business that is located and operates in the United States. You are also required to have invested equity in the company yourself, and you need to have tried and failed to receive funding from other lenders. Here are some of the ways you can submit your SBA loan application.
Approach a Local Bank
Numerous banks partner with the SBA to offer loan programs. The application procedure may take a considerable amount of time, but in the end, if you qualify, the terms and conditions will be better for your company. Consult with the lender about which SBA loan would best suit your company’s needs. The most common are SBA 7(a) loans, which can be used for real estate, working capital, equipment, refinancing debt, and purchasing businesses. SBA 504 loans are usually used for heavy equipment and commercial real estate.
Search Online with Lender Match
Lender Match is a free tool on the SBA website that helps connect borrowers with lenders. You provide some information and describe the needs of your business, your details are reviewed by SBA officials, and then you are sent an email with contact information about lenders that are interested in working with you. After communication with these lenders and comparing rates, terms, and other details, you submit your loan application.
Find a Small Business Development Center
Small Business Development Centers are funded by state economic offices and the SBA. Among the services they provide to small businesses is assistance with SBA loan applications. Keep in mind that regardless of the lender you choose, you will need to provide information such as your credit history, industry experience, business plan, financial projections, and an estimate of how much you’ll need and for what purpose.
For more advice on SBA loans, contact Coastal Commercial Lending.