Getting the right loan can make or break a small business. While you might not be able to operate without additional funding, you can’t expect your business to do well when you’re constantly scrambling to make monthly payments while interest fees continue piling up. When it comes to small business lending, it’s hard to find anything better than SBA loans. The terms are extremely favorable and the 7a Program is designed for business owners who might not otherwise get approved by a standard lender.
Limited Requirements
You shouldn’t expect to get approved for any sort of SBA lending if you have terrible credit and a weak financial history. However, the whole purpose of the Small Business Administration is the help the nation’s smallest companies that are so important to the economy as a whole. If you have less than two year’s worth of business documentation, it can be nearly impossible to get approved by a loan from one of the larger lenders. The SBA aims to find those startup businesses that show promise and need a little help in order to get off the ground.
What will be required of you is a solid plan for how you’ll use the funding and a credit score that’s somewhere between good and great. Loan terms will vary depending on the situation of the applicant, but it’s important that you’re able to present an excellent case as to why the lender should trust you and have faith in your business.
Funding Sources
Contrary to what some people believe, the 7a SBA loans don’t come directly from the SBA. You can get this type of funding through the major banks as well as many online lenders. The role of the SBA is to guarantee a portion of the funding, which in turn allows the lending company to relax the terms of the loan. This program will allow you to go through a smaller bank, perhaps the local branch in your hometown, and put together the best application with the help of a financial advisor. While these loans are highly competitive, funding through an SBA approved lender is still one of the best options for business that are just starting out.
If you’re worried that your limited financial history means you have to agree to a loan with poor terms, you need to look into SBA loans and the 7a program. With a good business plan and an excellent application, you could get the exact funding your company needs.