There’s a lot to love about being a small business owner: you get to set your own hours, chart your own path to success, and enjoy all the benefits that being your own boss comes with. If you want to be satisfied and fulfilled, opening your own business seems to be a tried and true way.
However, that doesn’t mean there aren’t plenty of obstacles along the way. For a small business owner, getting the funding together can be one of the most challenging things you have to do.
Scoring SBA loans can be one way to make sure your business gets the cash it needs to open up and run smoothly. What do you need to know about securing this kind of government assistance? Read on and we’ll walk you through the basics.
The SBA 7(a) Loan
If you’re looking to secure a small business loan from the. government, you’re most likely going to be looking into an SBA 7(a) loan. This is the most popular type of small business loan and is used to finance capital needs, refinance debts, or purchase new equipment for a business.
Why are these loans so popular? Unlike other SBA loans, the 7(a) loan is flexible in terms of both the cash amount and the application of the money. This makes it easiest for most businesses to secure this loan and use it to meet needs that might be specific to the business in question.
These loans can stretch up to $5 million in terms of the money handed out and are often paid back over five to ten years. Interest rates are generally low but can vary, and there will be a long application process when seeking one.
Seeking Small Business Loans
Contrary to popular belief, you don’t actually get a small business loan directly from the government or the small business administration. Instead, your loan can be secured by looking to SBA-approved lenders, from banks to credit unions to online lenders such as sbalenders.com.
There are a number of SBA loans out there, but in most instances, the Small Business Administration will back your loan up to 90%. This means if you were to default on the loan for some reason, the Administration would cover the lost costs.
This makes it easier for these banks and credit unions to agree to loan you the money, as it takes the risk out of the situation for them. They know they’ll be getting the money back. This is why so many banks and other lenders sign up to be an SBA loan service.
It can take longer to receive a loan when you go through this process, but your odds of being approved for one will be much higher.
Securing SBA Loans For Your Business
If you’re looking to start a new business or simply keep your current one afloat, you will need capital. Seeking SBA loans is one smart way that many business owners do this. The above information should cover what you need to know about these loans.
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