Published By Nikeya Williams at August 19, 2017
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.
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 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 have collateral, SBA will not refuse to guarantee a loan due to insufficient collateral, 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 meaning that you have fewer than 500 employees and your annual revenue is under $7.5. million.
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: You need to obtain 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.
1.Seasonal Line of Credit: This credit line uses seasonal increases, inventory needs or related increased labor costs up to $5,000,000.
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. You’ll have terms up to seven years.
SBA Export Loans checklist: If you want to apply for an SBA Export Loan, you’ll need to have a 660+ credit score, 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 Loan Checklist: 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 Checklist: If you want to apply for this loan, you will need to have a 660+ score, and 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.
As a business owner, you have a ton of chances to make for your business, 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, especially when you’re first starting out, but with an adequate amount of resources, you can make the right decision for your business.