Wednesday, December 28, 2016

Find Out Why SBA Loans Still Makes Sense For Your Business

By Jerry Bailey

The US Small Business Administration or the SBA provides debt capital to small businesses, which fail to fulfill the eligibility criteria required to obtain finance from banks and other conventional sources. Small business administration debt capital aim at strengthening and improving the economy of the nation by supporting the growth of small businesses. There are various ways start-up business owners can benefit from SBA loans. Let us discuss some of the advantages of this type of small business loan:

One of the first things that any entrepreneur should consider is the Small Business Loan. This is a government sponsored loan that has many benefits. Although the Small Business Administration does not come directly to the aid of small business, it does give a hand to people who want to run small businesses but do not have enough start-up capital or seed financing to do it.

However, these small business debt capital are not provided directly by the SBA. There are several private sector lenders who are guaranteed by Small Business Administration and follow Small Business Administration rules and regulations to provide these loan to start up business owners.

The Small Business Association can help facilitate debt capital for business owners through third party lenders, guarantee a bond, or help one raise venture capital. The Small Business Administration does this to help small businesses grow. Every business owner can choose the program that meets his needs. There are varied programs but they are all geared towards helping businesses meet key financing needs. These include debt financing, surety bonds and even equity financing. Do your research because being informed is the first step of obtaining a loan.

This categories of loan are beneficial for start-up business owners in a number of ways. Even with extremely poor credit histories such as bankruptcy, arrears, insolvency, IVA and others, when you cannot acquire debt capital from conventional lending sources, you can still avail SBA small business loans. By obtaining these capital you actually get an excellent opportunity to recover and improve your credit records.

Small Business Administration 7(a): These types are obtained for purchasing a new business or expanding an already existing one, purchasing machineries and refinancing existing debts. The advantages of these are almost same as Small Business Administration 504. This includes longer maturity periods than traditional loans, reduced down payment requirements on fixed assets, more convenient and relaxed eligibility criteria than conventional loans. Loan amount ranges from $350,000 to 3.5 million.

Small Business Administration Express: These can be used for purchasing inventory or vehicles, machineries etc. The various advantages of these credits include: Longer maturity period than most conventional loans. Easier and more relaxed lending requirements than conventional credits. Loan amount ranges from $25,000 to $350,000.

In conclusion, these categories of loan are quite convenient in terms of simplicity, ease of acquisition and affordability. You must make a research of the market and compare the various terms and conditions offered by the various banks and private sector lenders providing Small Business Administration loans. This is important to find the most suitable and reliable lender who would cater perfectly to your loan requirements.

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