Tuesday, 9 July 2019
You've got your brilliant idea, a rock-solid business plan, and you're ready to launch—or perhaps you're ready to invest in or improve an existing business—and you're going to need a loan.
The U.S. Small Business Association (SBA) is dedicated to helping entrepreneurs with advice, tools, and money.
For SBA and commercial loans, you'll need to meet a list of qualifications, including a little “skin in the game”—collateral you already have (generally about 25 percent) that comes from personal savings and assets, investors, crowd-funding, or other sources.
The SBA loan actually comes from a bank, but the SBA guarantees a percentage of the loan, which reduces the risk to its lending partners and makes it easier for business owners to get the financing they need. The SBA loan might be right for you if your business meets certain criteria:
An SBA loan and a commercial loan generally fulfill the same mission—to help fund the gap in your startup or established business costs—and require similar qualifications. There are some borrowers who would not qualify for an SBA loan, while they might for a commercial loan depending on the lender criteria, said David J. Hall, a spokesman for the SBA. “The main difference is that SBA tries to make the loan more affordable by generally providing longer repayment terms and, in some cases, no fees to both borrowers and lenders,” he said. “Also, while collateral is important, SBA would not decline a loan based only on lack of reasonable collateral.”
The SBA offers several different kinds of loans, which fund different business activities and investments. Interest rates are generally low, and are determined by the type of loan, amount, and repayment period. They include:
The best place to start your application is on the SBA website. You'll need to have:
To learn more and to get started on your application, visit the SBA website and start connecting with an approved lender.
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