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 from the U.S. Small Business Administration. This type of loan is ideal for businesses that are just getting started or that need a little assistance. Having the right amount of working capital is vital to the success of any small business. Life House Financial feels that the best way to obtain this working capital is through an unsecured business loan.
Unsecured business loans do not require you to put up collateral. However, because no collateral is required, lenders are sometimes cautious about who they approved for this type of loan. Lenders like to see at least 2 years of positive net revenue and an established business credit history. If this doesn’t sound like your company, an SBA or other secured loan may be your only option. To find out, submit your information now and we’ll call to discuss your options after a brief conversation about your business and its immediate financing needs.
Types of SBA Loans, 7(a), Micro, Express and 504
The SBA 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. It is the largest single financial supporter of small businesses in the country.
With an SBA loan, you do not receive funds directly from the government; you receive the money from a lending institution such as a bank, credit union, micro-lending institution or a community development organization. The SBA sets the guidelines under which the loan can be made and guarantees repayment should the borrower default on the loan. This guarantee reduces the risk to the lender, making it more attractive for the lender to generate the loan.
There are four types of SBA loans: SBA 7(a), micro, express and 504. Each loan has different qualifications in terms of collateral required, the amount that can be borrowed and how the money can be used.
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 business; for buying land, buildings, materials or equipment; as short- or long-term working capital, including financing building projects and accounts payable; and refinancing some types of current debt.
SBA Micro Loan
The SBA micro loan program is geared toward smaller, short-term loans. Up to $50,000 can be received through this loan and used as working capital or for buying equipment, supplies or furniture. Terms depend on the lending organization and the amount of the loan; collateral is usually required.
SBA Express Loan
Under the SBA express loan, the SBA responds to your application within 36 hours. It is designed for active duty military personnel, veterans and small-business owners in distressed communities. Funds can be used for buying equipment or materials, start-up costs, preparing your business for deployment and disaster recovery.
SBA 504 Loan
The SBA 504 loan program was created for a for-profit business with a net income of $5 million or less two consecutive years and a tangible net worth of $15 million or less is eligible for a SBA 504 loan. Up to $5 million can be loaned and used to purchase land or buildings, renovate existing buildings or improve land, and to purchase long-term equipment or refinance some debt. Collateral is required and the borrower must meet job creation or retention requirements. The interest rate is fixed and the loan can be taken out for 10 or 20 years.
If you are interested in an SBA loan, Life House Financial can help you decide which type of loan you qualify for, and which one is best based on your financial situation and specific needs. To learn more about how a small business loan can benefit you, call us today or submit your information by clicking get started below.