If you have a small business or want to start a small business, chances are you’re familiar with the loan process. You gather your documentation, apply for the amount you need and wait to see if you’re approved. Or not. Did you realize you have a resource in your corner which can help you? The Small Business Administration is a government-run entity which exists to help small business owners succeed in their endeavors. Not only is it government-run, its government-funded by your tax dollars. Clearly, there’s no reason to fail to take advantage of this program.
Loans from the SBA
If you’ve heard of the Small Business Administration, it’s probably in the context of SBA loans. That’s their most well-known function. How does it work, though? Do they simply loan you back the money they already collected from you in taxes? That would be a solid ‘no.’ When the SBA talks about loans, they mean they help facilitate the loan process on both ends. This means they can help you get your documentation ready, guide you in what to expect and steer you towards a lender who will most likely approve you.
On the lender’s side of the loan equation, the SBA vets them carefully. Are they reliable and have a good reputation? Are their terms fair to their borrowers? Are their rates competitive? The SBA looks into these things on your behalf.
There are SBA loans and there are sba loans. What’s the difference? Not all small business loans go through the Small Business Administration. Some sba loans go directly from the lender to the borrower. In that event, you’ll be the one gathering and preparing your documentation as you chose a lender from among those available to you. Lenders choose you in return. Across the board, they start with the same basics. Sba loans usually go to businesses with a minimum of two years in operation with strong revenue streams. The business owners tend to have good personal credit scores, too.
Other items that help a prospective lender decide if you’re a good risk include your business credit score, the seasonal fluctuations in your business, your assets and your business plan. If you don’t already have a business plan written down, this a great time to do that. There are business plan templates available online which can help you get started. There’s no reason to not avail yourself of that help.
Sba loans come from many sources while still requiring a similar approval process.