Credit Suite Blog

Get current information on getting credit and loans to grow your business

CLICK HERE TO LEARN MORE

Here’s How You Can Get an SBA Loan

Published By Janet Gershen-Siegel at August 19th, 2017

Yes, You Can Get an SBA Loan

Small Business Administration (SBA) grants millions of loans, counseling sessions, business development assistance, etc. available for business owners. Choosing the wrong SBA loan could mean that you’re losing out on important benefits that could help your business.

What’s the Best Way to Select a Loan?get an SBA loan Credit Suite2 - Here’s How You Can Get an SBA Loan

Picking the right loan for your business is vital to the growth and success of your business. There are six types of SBA loans that you can apply for. But before you apply for an SBA loan, you’ll need to know the details of each loan.

SBA 7(a) Loans

  1. SBA 7(a) Loans: So this is the most common SBA loan. It usually loans up to $5,000,000, and it can be used for working capital to refinance debt, buy a business, real estate, or equipment. SBA 7(a) loans can also include SBA Express Loans and SBA Advantage Loans.

SBA 7(a) Loans checklist

If you want to apply for an SBA 7(a) loan you need to have a good credit score of above 680. And you can’t have any recent bankruptcies, foreclosures, or tax liens. If you do not have collateral, SBA will not refuse to guarantee a loan due to insufficient collateral. But most of the time lenders are less likely to approve a loan that’s not sufficient collateral.

Also, you have to be a small business defined by the SBA. So this means that you have fewer than 500 employees. And, your annual revenue is under $7.5. million.

CDC / SBA 504 Loans

2.CDC / SBA 504 Loans: You can combine this loan from a nonprofit CDC with a loan from the bank to create a better interest rate for up to $20,000,000. If you’re looking to buy or build facilities or you need heavy equipment, then you might want to use this loan.

CDC / SBA 504 Loans checklist

So you need to have a 680+ credit score. And you’ll need a 10 percent down payment for the loan. Also, you’re going to need to meet the job creation or public policy requirement goals. Your real estate has to be at least 51 percent owner occupied.

SBA CAPLines Lines of Credit

  1. SBA CAPLines Lines of Credit: CAPLines are SBA lines of credit that exist to help small businesses such as manufacturers, contractors, and exporters, cover the cost of labor and materials that are necessary to fulfill contracts. Moreover, SBA loans offer five types of lines of credit. And it can be fixed or revolving credit lines.

Here are the five lines of credit that you can apply for:

      1. Seasonal Line of Credit

This credit line uses seasonal increases, inventory needs or related increased labor costs up to $5,000,000.

  1. Contract Line of Credit

You can use this line of credit for the cost of materials associated with assignable contracts that can be up to $5,000,000.

  1. Builders Line of Credit

If you’re a contractor then this line of credit is fit for you. With this line of credit, you can renovate residential or commercial buildings. You can get up to $5,000,000 to use for your line of credit.

    1. Standard Asset-Based Line of Credit

As a small business, you can convert short-term assets such as pending invoices into cash with this line of credit. You get up to $5,000,000 to use for your line of credit.

  1. Small Asset-Based Line of Credit

This line of credit allows the small business owner to convert short-term (invoices) into cash. However, this credit line is a bit stricter serving requirements are waived by the SBA. This gives the small business owners a credit line up to $200,000.

SBA Export Loans

This loan gives small business owners the flexibility and the funding to new exporting operations, which offers a cash flow solution to small business owners because they can offer better terms to their international customers. So here some of the SBA Export loans that you can get:

      1.SBA Export Express Loan

Get streamline funding up to $500,000 in working capital to promote small businesses giving you the ability to export activities. So you’ll have terms up to seven years.

  1. SBA Export Working Capital Loan

You can get funding up to $5 million in working capital to fund export transactions along with purchases from foreign customers. You’ll typically have under 12 months, but up to three years for the terms.

  1. SBA International Trade Loan Program

Funding is up to $5 million for working capital or fixed assets for businesses that are negatively impacted by imports. You’ll get up to 25 years in term.

SBA Export Loans checklist: If you want to apply for an SBA Export Loan, you’ll need to have a 660 credit score or better. And your business must be involved in exporting goods or services to foreign countries. Also, your business must be at least one year old.

SBA Microloan Program

The microloan program is up to $50,000 to nonprofit intermediary lenders. This loan also has higher interest rates (8%-13%), it’s higher than most other SBA loans. You can’t get microloans  through nonprofit, community-based organizations. And you can’t use them to refinance debt or purchase real estate.

SBA Microloan Loan Checklist

So you will need to have a 640 credit score to apply for this loan. Typically, you will need to provide some collateral. And non-profit child care is eligible in some cases to apply for the loan.

SBA Disaster Loans

This is a disaster loan that is available for small businesses and organizations that are located in a disaster zone and suffered damage to property, and if the business loses a key employee who is a military member on active duty.

SBA Disaster Loans Checklist

If you want to apply for this loan, you will need to have a 660 score or better. In addition, your business must have suffered a physical or economic damage from a disaster. Moreover, your business has to be located in the SBA declared disaster area.

Get an SBA Loan: The Bottom Line

So as a business owner, you have a ton of chances to make your business work. And having a better understanding of SBA loans provides you with more knowledge on how to grow your business financially. Finding the right funding for your business is a hard thing to do. So this is especially when you’re first starting out. But with an adequate amount of resources, you can make the right decision for your business.

2 Comments

  1. carmen`s hogg parts . is requesting a loan

    • Janet Gershen-Siegel says:

      Hi,

      Thanks for asking. I’m passing along your question and someone should be in contact shortly.

Leave a Reply

Your email address will not be published. Required fields are marked *