Small Business Administration (SBA) Loans
So many Business Owners don't realize the opportunity they have for financing. It surprises us, here at The Confident Broker, how many times a week talk to a prospect who probably would qualify for an SBA 7(a) Loan or even a Micro Loan. There is a major misunderstanding when it comes to the SBA and as simple as their website is, we can see how you can go around in circles and maybe give up. We won't let you.
The SBA-guaranteed Loans are only available through approved Lenders and the first thing you do when searching for a lender match through their system is putting in your information and obtaining a PIN in your email to proceed in getting matched. We decided to go through this process for you so you know what to expect using the SBA Lender Match.
Odds are if you don't fit the criteria for an SBA backed loan, you'll wind up working with another Lender Match (Broker) who has funding outlets just like us. We actually made sure that we can partner with the preferred lending companies to offer the same products and programs to give small business owners a fair advantage.
The quick checklist for SBA Lending
To qualify for an SBA loan, your business must meet the following criteria:
Business size: Your business must be small according to SBA size standards. Size standards vary by industry, based on factors such as number of employees or annual revenue.
Business type: The SBA provides loans to for-profit businesses operating in the United States. Certain types of businesses are not eligible for SBA loans, such as passive real estate investment firms and pyramid scheme businesses.
Purpose of loan: The loan must be used for a legitimate business purpose, such as starting a new business, purchasing equipment, or expanding an existing business.
Ability to repay: Your business must have the ability to repay the loan on time, based on the lender's evaluation of your creditworthiness and business cash flow.
Personal investment: You must have a personal investment in the business, which could include cash, equipment, or other assets.
Collateral: Depending on the loan program, you may need to provide collateral to secure the loan. Collateral could include real estate, equipment, or other assets.
Good credit: You should have a good personal credit score, as well as a strong credit history for your business.
It's important to note that the requirements and application process can vary depending on the specific SBA loan program.
The (SBA) 7(a) loan program is designed to provide financial assistance to small businesses in the United States. To be eligible for an SBA 7(a) loan, a business must meet the following requirements:
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Size: The business must be classified as a small business based on SBA size standards. These standards vary by industry and are based on the number of employees or annual revenue.
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Eligible use of funds: SBA 7(a) loans can be used for a variety of business purposes, including working capital, purchasing equipment or inventory, refinancing debt, or financing real estate.
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Creditworthiness: The business must have a strong credit history and demonstrate an ability to repay the loan.
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Collateral: SBA 7(a) loans may require collateral, which can include business assets, real estate, or personal assets.
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Owner’s equity: The business owner must have a personal investment in the business, typically at least 20% of the total project cost.
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Business plan: The business must have a well-written business plan that demonstrates the viability and profitability of the enterprise.
You can find more eligibility requirements and up dats on the SBA website's terms and conditions page
An SBA 504 loan is a type of small business loan that is designed to help businesses purchase or improve real estate or major fixed assets, such as equipment or machinery.
The SBA 504 loan program is different from the SBA 7(a) loan program, which is more flexible and can be used for a wider range of business expenses. The SBA 504 loan program is designed specifically for long-term, fixed asset financing, and offers a few key benefits:
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Low down payment: Borrowers can typically finance up to 90% of the cost of the asset or real estate purchase, with a down payment as low as 10%.
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Long-term, fixed-rate financing: SBA 504 loans offer long-term financing with fixed interest rates, typically up to 25 years for real estate and 10 years for equipment or machinery.
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Favorable interest rates: Because the loan is partially guaranteed by the SBA, lenders are able to offer favorable interest rates to borrowers.
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No balloon payments: Unlike many commercial loans, SBA 504 loans do not require a large "balloon payment" at the end of the loan term, which can be a significant financial burden for borrowers.
To be eligible for an SBA 504 loan, businesses must meet certain size standards and be in operation for at least two years. The loan can be used for a variety of purposes, including purchasing real estate, renovating existing facilities, or purchasing equipment or machinery.
An SBA 504 loan is a type of small business loan that is designed to help businesses purchase or improve real estate or major fixed assets, such as equipment or machinery.
The SBA 504 loan program is different from the SBA 7(a) loan program, which is more flexible and can be used for a wider range of business expenses. The SBA 504 loan program is designed specifically for long-term, fixed asset financing, and offers a few key benefits:
-
Low down payment: Borrowers can typically finance up to 90% of the cost of the asset or real estate purchase, with a down payment as low as 10%.
-
Long-term, fixed-rate financing: SBA 504 loans offer long-term financing with fixed interest rates, typically up to 25 years for real estate and 10 years for equipment or machinery.
-
Favorable interest rates: Because the loan is partially guaranteed by the SBA, lenders are able to offer favorable interest rates to borrowers.
-
No balloon payments: Unlike many commercial loans, SBA 504 loans do not require a large "balloon payment" at the end of the loan term, which can be a significant financial burden for borrowers.
To be eligible for an SBA 504 loan, businesses must meet certain size standards and be in operation for at least two years. The loan can be used for a variety of purposes, including purchasing real estate, renovating existing facilities, or purchasing equipment or machinery.
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