Get an SBA Loan to Finance Your Startup
SBA (Small Business Administration) is a 7(a) loan program. Out of all the different financing options which are available, SBA loan program is amongst the very best.
SBA 7(a) loan program is focused on helping small business-owners with a bank loan when they need financial assistance.
Getting your business started with bank financing is a very good way to start out, if you are able to get it. It’s recommended that you check out this 7(a) loan-program when you’re finding ways to finance your new business.
It’s recommended for two very good reasons:-
* Compared to most other options it’s much cheaper.
* The bank will not try to tell you how you should run your own business, so it’s a lot less restrictive than other forms financing.
How the 7(a) Loan Program Works
1. First you need to apply at your bank for a business starting loan.
2. If your banker does not recommend it, you should ask for an SBA 7(a) loan.
3. You have to fill out the 7(a) loan application form. You’ll also need to provide a business plan.
4. The bank will then check your application form and the business plan. This will help them decide whether or not you are eligible under the SBA guidelines, for a start-up loan.
5. Once you have been approved, your bank will receive a loan guarantee from the SBA. SBA guarantees up until 85% of loans that are $150,000 dollars or less.
6. To get the loan guaranteed, the bank must accept the SBAs guidelines. Loan terms with SBA are longer and the interest will be lower than anywhere else. Whether or not you have started a business before is not irrelevant.
7. You will be happy because of the fact that you’re getting the financing for your business. Your bank is also happy because 85% is guaranteed so they are not running a high risk by lending you money. It’s a satisfactory end result.
Some Other Things You Should Remember
* Financing for starting businesses which need $150,000 or less, have very high rates of approval. (If you want to buy a business you could go until $250,000 while keeping a high rate of approval)
* Your business plan needs to be carefully thought out. You should also have income and expense projections. Business experience is a big help. You’ll need a good credit history in order to be approved.
* You should plan a couple of weeks (roughly 4-7) in between the time you start your loan applications until you receive the money.
* If your credit scores are under 600 or if you have had a bankruptcy in the past 7 years, you won’t be approved for the loan.
To sum it all up, the SBA 7(a) loan-program will be ideal for any business owners who are just starting out and need to borrow money.