The small business loan that makes a big impact.
The U.S. Small Business Administration (SBA) is a federal agency built solely for the purpose of helping small businesses get the funding they need. The SBA doesn’t actually foot any of the cash. Instead, it establishes the guidelines for loans and then guarantees a portion of those loans. Because lenders have much less risk in the case of a default, they’re more likely to provide funds to entrepreneurs.See your options
SBA loans are a hot commodity, with rates and terms comparable to bank loans even for entrepreneurs who normally couldn’t get the time of day from a bank. Because the SBA guarantees the loans, it’s more desirable for banks than your loan itself. In fact, the banks will actually fight for your business. This means you often get hooked up with better rates and terms.
If you’re still not sure if an SBA loan is worth considering, you should know that they carry monthly payments, fixed interest rates, and long repayment terms. They provide a great way to improve your credit so you’re in a better position to apply for a different kind of loan when you need your next round of funding.
While SBA loans are significantly easier to attain than a traditional bank loan, they’re still more difficult to acquire than most loans from non-institutional lenders. They’re known for being more paperwork intensive, with a much longer time to funds and a higher percentage of rejection than direct online lenders.
When you meet with your SBA lender, you’ll need to provide enough information to assess your loan application for a pre-approval letter. Make sure you have business and personal financial statements, business and personal tax returns for the last three years, signed authorization for background and credit checks, as well as outlines for how the proceeds will be used.
You can use Lendio’s platform to connect with lenders that offer these long-term, low-interest loans. We’re happy to provide insights to help you expedite things, regardless of the loan size. Our funding managers know exactly what is required to navigate the SBA loan process, getting you from application to funding as quickly as possible.