Everything You Need to Know About SBA Loans

When you need a competitive way to grow your business or launch your startup, you need to consider SBA loans. Whether you need major funding or a small loan to get your company on its feet, learn how an SBA loan can help you accomplish your business goals and avoid high-interest loans and excessive debt.

What Does SBA Mean?

SBA stands for the Small Business Administration. The SBA backs loans specifically for small businesses. These competitive loans typically have generous interest rates and reasonable loan limits and payment plans. If you’re struggling to receive a typical loan due to your credit score or financial history, SBA financing may be right for you.

These loans have complicated applications, but don’t require the same amount of financial history or high credit score as a traditional bank loan. Once you understand the application process, it can be the perfect financial tool to get your business moving.

SBA 7(a) Loans

By far the most popular SBA loan option is an SBA 7(a). These loans are backed significantly by the SBA, so your lender can offer you a loan that would otherwise be too risky for someone with your financial history. You can invest your 7(a) loan in a variety of ways, making it a flexible option for many small businesses. Secure your commercial property, pay franchise fees, make payroll on time or invest in quality equipment to offer industry-leading services.

To apply for an SBA 7(a) loan you’ll need to fill out a personal history, financial statements, loan application history and provide your lender with your personal income tax returns and business income tax returns. These are required to not only ensure you’ll pay your loan back, but also to verify that you qualify as a small business owner.

SBA 504/CDC Loans

An SBA 504/CDC loan is similar to a 7(a) loan, but more specialized. Use this loan type to secure the equipment you need or purchase land to begin construction on your commercial building. A 504 loan may be right for your particular project, but restricts your spending further. Depending on your financial needs, it may be easier to receive this type of funding for your project.

Choosing the Right Loan

Learn more about SBA loans by contacting your local lender today. While backed by the SBA, these loans are administered by third-party banks and financial institutions. Find out how an SBA loan can give you the necessary funds you need to start your business or take it to the next level.

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