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SBA Loans...
| Starting a new business can be an extremely difficult task. One of the most crucial aspects of starting a new business is the financing. We can assist you through the process and ensure that your business receives the funds that is requires. Contact us today and find out how to take your business plan to the next level. |
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| • Refinance • Purchase Real Estate • Lower your bills • consolidate debt • Get cash out • Credit improvement • Expand your business |
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How Do I Get an SBA Loan?
An important source of financing for U.S.-based entrepreneurs is the
Small Business Administration (SBA). The SBA provides short- and
long-term loans to eligible, credit-worthy start-ups and existing small
businesses that cannot obtain financing on reasonable terms through
normal lending channels.
Note, however, that SBA does not provide direct loans. Rather, the
agency provides guarantees to loans availed through SBA's partner
lending institutions, which includes many community banks. The applicant
must satisfy the lender's requirements before he or she can ask for a
guaranty from the SBA, unless the borrower is deemed prequalified based
on the person's character, credit, reliability and experience
(prequalification is for loans $250,000 or less).
SBA provides a number of loan programs for most business purchases,
including purchasing real estate, machineries and equipment, inventory, or
working capital. Some loans focus on assisting businesses affected by
specific economic conditions, such as those affected by defense cuts, and
those at risk due to changed trade patterns with Canada and Mexico.
There are also a number of loans for small businesses engaging in export
and international trade, while some loans are geared for environmental
concerns.
To avail of SBA loans, the borrower must meet these criteria:
1. The borrower must have a stake in the business. The SBA wants to see
those applying for credit to have invested in their own business. In SBA's
view, business owners who have put their own money into the venture are
much more likely to push hard for the success of their business.
Depending on the loan program applied for, SBA requires the borrower
to have invested between 25 to 50 percent of the amount requested. The
SBA will not underwrite 100% of the venture. Hence, a borrower
seeking a $100,000 loan should have already invested about $25,000 to
$50,000 in the business.
2. A strong business plan. Like banks and other financial institutions, SBA
requires the submission of a business plan. Through the plan, the SBA
wants to see that the entrepreneur possesses a clear understanding of the
business they're in, have taken steps to research the market, and studied
the prospects of the business. The SBA wants to see detailed plans on
how the business can make money. More importantly, they want to know
how the entrepreneur can repay the loan and whether the business can
earn enough to at least cover the monthly payments.
3. A good personal credit rating. The credit history serves as a person's
gauge for credit worthiness. The borrower's track record in paying their
bills will form an important component in the loan application process. The
SBA partner banks, which provide the money, usually conducts a credit
examination of the borrower then submits the results to SBA. Since SBA
requires that the borrower personally guarantee the loan, he or she must
show a history of honoring and repaying debts on time. Bankruptcies and
poor credit history may lead to difficulty in availing SBA loans.
An important source of financing for U.S.-based entrepreneurs is the
Small Business Administration (SBA). The SBA provides short- and
long-term loans to eligible, credit-worthy start-ups and existing small
businesses that cannot obtain financing on reasonable terms through
normal lending channels.
Note, however, that SBA does not provide direct loans. Rather, the
agency provides guarantees to loans availed through SBA's partner
lending institutions, which includes many community banks. The applicant
must satisfy the lender's requirements before he or she can ask for a
guaranty from the SBA, unless the borrower is deemed prequalified based
on the person's character, credit, reliability and experience
(prequalification is for loans $250,000 or less).
SBA provides a number of loan programs for most business purchases,
including purchasing real estate, machineries and equipment, inventory, or
working capital. Some loans focus on assisting businesses affected by
specific economic conditions, such as those affected by defense cuts, and
those at risk due to changed trade patterns with Canada and Mexico.
There are also a number of loans for small businesses engaging in export
and international trade, while some loans are geared for environmental
concerns.
To avail of SBA loans, the borrower must meet these criteria:
1. The borrower must have a stake in the business. The SBA wants to see
those applying for credit to have invested in their own business. In SBA's
view, business owners who have put their own money into the venture are
much more likely to push hard for the success of their business.
Depending on the loan program applied for, SBA requires the borrower
to have invested between 25 to 50 percent of the amount requested. The
SBA will not underwrite 100% of the venture. Hence, a borrower
seeking a $100,000 loan should have already invested about $25,000 to
$50,000 in the business.
2. A strong business plan. Like banks and other financial institutions, SBA
requires the submission of a business plan. Through the plan, the SBA
wants to see that the entrepreneur possesses a clear understanding of the
business they're in, have taken steps to research the market, and studied
the prospects of the business. The SBA wants to see detailed plans on
how the business can make money. More importantly, they want to know
how the entrepreneur can repay the loan and whether the business can
earn enough to at least cover the monthly payments.
3. A good personal credit rating. The credit history serves as a person's
gauge for credit worthiness. The borrower's track record in paying their
bills will form an important component in the loan application process. The
SBA partner banks, which provide the money, usually conducts a credit
examination of the borrower then submits the results to SBA. Since SBA
requires that the borrower personally guarantee the loan, he or she must
show a history of honoring and repaying debts on time. Bankruptcies and
poor credit history may lead to difficulty in availing SBA loans.