SBA Loan Financing Made Easy
If you are just starting your business, or do not have an adequate history of positive business credit, you may want to consider a loan backed by the U.S. Small Business Administration. SBA loans are ideal for businesses that are just getting started or that need a little assistance to expand and grow.
When thinking about an SBA Loan, you’ll first need to determine which loan type is best. When doing so, you’ll have a few options to choose from: SBA 7(a), the Microloan, an Equipment Loan CDC/504 or a Disaster Relief Loan. If you are a Veteran-Owned small business, you may also have preference when applying for a SBA Loan. Each of these programs has certain requirements that need to be met in order to qualify. Beyond just knowing the programs, you’ll need to know how to apply, and which banks to approach to get things started. This is where Life House Financial can help.
Having the right amount of working capital is vital to the success of any small business. At Life House Financial, we help small business owners connect with the loan products and lenders that are best for their needs everyday. We can help you compare your options side by side to ensure you get the best terms and lowest rates possible. To get started, submit your information using the big orange button below. We’ll get to work right away.
SBA Loans: 7(a), Micro, and 504 Explained
The SBA (Small Business Administration) is a federal program designed to help and protect small businesses in the United States. Founded in 1953, the SBA provides training, counseling and financial backing to small business owners nationwide. The SBA is the largest single financial supporter of small businesses in the country.
When you obtain a SBA loan, you do not receive funds directly from the government. Instead you receive money from a traditional lending institution such as a bank, credit union, micro-lending institution, or community development organization. The SBA sets the guidelines under which the loan can be made and also guarantees the repayment of the loan should the borrower default. This means if the borrower doesn't pay, the government will step in and make the bank whole. This guarantee reduces the risk to the lender, making it more attractive for a lender to approve a loan.
There are a few types of SBA loans: SBA 7(a), the Microloan, 504 and Disaster Relief Loan. Each loan type has different qualifications in terms of collateral required, the amount that can be borrowed, and how the money can be used.
General Small Business Loan: SBA 7(a)
The SBA 7(a) loan is designed to help businesses that have specific needs, such as an exporter or a rural-based business. Funds can be used for buying or expanding an existing business or starting a new one. For this purpose, funds can be used for buying land, buildings, materials, or equipment. Funds can also be used for short or long-term working capital.
The SBA Microloan program is designed for those companies that need a smaller, shorter term loan. SBA Microloans go up to $50,000 and can be used for working capital, buying equipment, supplies or furniture. The terms on this loan vary and depend on the lending organization and the amount of money being requested. SBA Microloans usually require collateral for approval.
SBA Disaster Loan
For those individuals who have experience a disaster, the SBA can help you by providing you a low-interest rate loan. SBA Disaster Loans are available to homeowners and businesses of all sizes. These loans can be used to repair or completely replace items that have be destroyed in a declared disaster zone. These items can include real estate, some types of personal property, equipment, inventory and other business assets.
SBA 504 Loan
The SBA 504 loan program can be used by a for-profit business with a net income of $5 million or less (for two consecutive years), and a tangible net worth of $15 million or less. SBA 504 Loans go up to $5 million, and can be used to purchase land, buildings, to renovate an existing buildings, or to improve land. It can also be used to purchase equipment or refinance debt. In order to qualify, collateral is required. The borrower must also meet certain job creation or retention requirements.
How Life House Financial Can Help
If you are interested in a loan backed by the Small Business Administration, Life House Financial can help you determine if you qualify. We will also help you determine which SBA Loan type is best for your situation. If for whatever reason it is determined a SBA Loan is not best for your needs, we can help you find some alternatives. As a company dedicated to helping consumers and small business owners connect with lenders nationwide, we'll help you compare all options side by side.
To learn more about how a small business loan can benefit you, give us a call or submit your information by using the big orange button below. Our SBA Loan experts would be happy to go over all your options, in simple terms, that are easy to understand. Get started today!