SBA Loan Guidance: 3 Tips That Can Help
Starting a new business or growing one you already have can be daunting. There are probably plenty of things to do on your list for success, and finding the capital to pursue a new venture can be one of the biggest issues you run into. Many business owners don’t have luck when going the route of traditional loans, but that doesn’t need to be the end of the search. The US Small Business Administration, while not a lending institution, has plenty of loans that your business may qualify for. If you’re not sure which of the SBA loans is the one for you, here are three tips.
If You Need Supplies…
Look into a microloan! SBA microloans are great for those needing to purchase inventory or equipment, or even other elements of your business location. With this loan, you can borrow up to $35,000, but many borrow far less. This type of loan isn’t available everywhere, so check the requirements for your state.
If You’re Looking to Expand…
Check out a 504 loan! Of all the SBA loans, this one could be the perfect choice for companies trying to grow or expand their current businesses. If you need to upgrade your location or equipment, or even buy real estate for a new location altogether, this loan with a fixed-rate of interest might be your best bet. These loans do have specific requirements about business operations, net worth and income, so make sure you qualify before applying.
If You’re Just Starting Out…
Research the Basic 7(a) Loan Guaranty program. You may find this program to be the most flexible, seeing as it can be used to fund a number of business expenses. This can make it an excellent choice for new business owners looking for start up capital. The funds can also be used for inventory or equipment. You may even be able to refinance debt. Many small businesses should qualify, as the requirements are not extremely strenuous, but there are a few things you should look into before you submit an application.
If you’re trying to get one of the several available SBA loans, look into the pre-qualification program. Even if your credit isn’t the best, others will review your business history and even your character as part of the process. By working with an intermediary, you can get a better idea of how the loan process works and what will give you the biggest advantage as you progress through the process. This can help you prepare the documents you need, giving you your best chance of success.