Many of the traditional lenders will not offer your business the financing you need in order to get your business started. Since small businesses are considered a risky investment, your financing options may be limited. Small business administration loans are an option you need to consider looking into. Working with the small business administration is actually easier from traditional lenders as they are in business to help you and watch your business succeed. Since there are over 28 small businesses in the United States and more are starting to develop and grow, it is no wonder why organizations like the SBA exist to help these small businesses acquire the money they need to stay in business.
How do I acquire small business administration loans?
The first step you need to take is to contact the small business administration. Find out what loans you qualify for and what you need to do in order to acquire them. They can help you find SBA approved lenders that may even be able to provide you with grant money to get your small business started. Most lenders want to work with the SBA because they will guarantee each loan they offer. This way you can acquire the money from the lender without them feeling like you are a high risk investment because the SBA will back your loan. The SBA will pay a 90% guarantee on the losses banks may experience with SBA loans. Since there is over 80 million dollars offered to small businesses each year, you should easily be able to acquire some of the money you need to finance your business.
How do small business administration loans work?
Now that you know what lenders offer the money you need, you must be able to figure out how the loans work. Typically when you work with the SBA loans, you need to be prepared to not only provide information pertaining to your business plan and business credit, you must be able to offer a down payment on your loan. Lenders are seeking at least 20-30% or more of the total down payment amount for the loan.
How much money can I acquire?
When you apply for small business administration loans you can usually acquire up to $35,000. the amount of money you acquire is up to your credit score and what you have been able to accomplish during the short amount of time you have been in business.
What are the repayment terms like?
The nice thing about small business administration loans is that the repayment terms are usually very generous. For a $5,000 loan the payment may be less than $60 a month and you have the luxury of obtaining a low interest rate of 7% or less no matter how bad your credit may be. Once you apply for the loan and you are approved for it, you will have the money in 14 days or less.
What information will the SBA ask for?
If you have been turned down for small business administration loans in the past, you know how frustrating it can be to acquire the money you need. One mistake with your business plan could mean that you are disqualified from the loan approval process. On your loan application you need to state exactly how much you money you need and where all of the funds will be used. Are you going to acquire new machinery or equipment with the money? As long as you can show lenders that you have a plan of action for the financing, they will be able to approve you for the loan.
Corporate Credit Concepts specializes in small business administration loans. For more information about small business administration loans and how it might benefit your business, please CLICK HERE for a free phone consultation.