SBA Lenders Can Be the Answer to Your Small Business Needs
If you own your own small business or are thinking of starting one, you’ll need a lot of capital. This is important whether you are restructuring or trying to keep up with those startup costs, and you’ll need some special help to get started. You’ll want to get support from an SBA (Small Business Administration) lender before you go to a standard bank.
An SBA lender is a lender who lends money specifically to small businesses. Because SBA lenders are backed by the SBA, you won’t need large amounts of collateral and it enhances your chances to get approval for the money you need. Everyone knows how hard it is to get credit these days, so any help you can get will be beneficial to your business. Imagine owning a small popular restaurant, and you are doing fine, but you know that by opening another restaurant in a new location that you could really break things open. You just don’t have the capital, and that’s where an SBA loan comes into play.
The best thing about getting a loan from an SBA lender is that they can significantly reduce the cost of doing a loan and lower the amount of risk you have to take to get the loan. Aside from low capital requirements, SBA backed loans also relieve you of points or balloon payments, allows you longer amortization periods (as much as 25 years on a standard 7a SBA loans), and increases your loan-to-value financing.
Many small business hopefuls may not know where to look for an SBA loan, but it is good to know that there are in the number of 800 SBA approved lenders available for your small business needs, and many of the SBA approved lenders are small community banks, so there is bound to be one near you. SBA lenders offer support for small businesses affected by certain economic conditions and also for many much needed purchases like equipment, capital and inventory.
You should use common sense in your approach to any SBA lender (www.sba.gov). Your presentation should include how, exactly, you are going to generate enough cash flow so that you can pay off your loan in the time allotted. Any SBA lender will want to know just how well you have studied the market and if you have a firm knowledge about the business you are pursuing. They will want to know that you or your management team has a good understanding of business and have a solid game plan on how you will progress. They may ask you how you will handle adversity, and what you will do if part of your plan fails. Don’t be intimidated. Answer their questions, and if you don’t know the answer, make sure you have someone on hand who can. An SBA lender will want to know you have a personal stake in the business, and that you’ve put up your own money and resources in the name of making your business work. Any SBA lender will want to make sure you have a good credit rating, as this will be an indication to the SBA lender that you are intent on paying your monthly bills. And the final requirement is that you be able to put up some collateral. While you’ll be receiving a break in collateral due to the loan being backed by the SBA, the lender will still want to know they will get some of their money back if you fail to pay on the loan.
In summation: Have a game plan, have the knowledge to back it up, and have some of your own blood, sweat, tears, and money to put on the table.
If you are the type of person who has invested their life savings, hours of dedication, and hard work into their business, and are looking to take your business to new heights, then a loan from and SBA backed lender is likely the next step for you. It is much easier for a business that has been around for a year or two to acquire an SBA loan. However, even if you are starting up your new business, and have a respectable credit report and the dream to back you up, it is time to look into an SBA backed loan.
Imagine the next phase of your plan being backed up by a hundred thousand dollars or more. Whether it is a coffee shop, a machine company, or a construction company, having the proper backing is the only way to ensure that you can double or triple your profits.
