The Small Business Administration is United States Government agency that promotes the growth of small businesses in the domestic market. The SBA’s primary purpose is to help small businesses in setting up and running their firms. Instead of providing loans directly, the SBA works with traditional lenders to provide SBA guaranteed finance. The SBA insures part of your loan, which makes lending to you a more attractive option for commercial lenders who may be concerned about your ability to pay back the principal amount. The SBA is a type of co-signer for the loan; if you have limited credit or start-up capital this can be easier than receiving a traditional loan. This reduction in risk encourages lenders to provide capital to small businesses around the country.
What Can a SBA Loan Be Used For?
SBA loans can be used for a wide variety of operating costs within your business. A popular SBA loan is called a 7(a) loan — it offers applicants up to $5m in capital for their business. It is aimed at helping business owners with starting or expanding a business in the United States. The 7(a) is by far the most flexible option as it allows the funds to be used at the discretion of the business owner. Other types of financing are also possible through the SBA. One of these is an export assistance loan intended to help companies expand their exporting capabilities. Another is CAPLine financing, which primarily finances expenses associated with seasonal industries. In addition, disaster loans are available for businesses that experience substantial damages by official disasters within the United States. Contact a SBA loan provider for the full list of potential loans on offer.
What’s the Process?
In order to apply for a SBA loan, you will need extensive documentation. Many lenders will require you to have some of the following documents in order to apply for the loan:
- Business history
- Tax Returns
- Previous loan applications
- Ownership information
- Information on each principal
- Financial statements
- Profit statements
- Business licenses
There is also a significant chance you will need additional documentation — you can find this by contacting your lender directly. Once you hand in all necessary documentation to your lender, they will send it to the SBA for a final review.
Should I Apply for a SBA Loan?
A SBA Loan can be a useful option for a business owner with limited credit history. It allows many small business access to traditional lenders that would otherwise not be possible. On the other hand, the application is lengthy and complicated — many forms are required and it can take months for the SBA to review your application. We offer low-rate affordable solutions that can get you working capital quickly. Our entire application is streamlined through an online portal, which ensures you get the money you need within a matter of days. In addition, we make our decisions based off easy-to-find revenue data which makes the process as painless as possible. Apply online today to get the financing you need to start or expand your business!
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