Find the Right Loan for Your Small Business

 
12/21/2019

By William Manger,

It’s no secret that it costs money to start a business. Determining how much financing you’ll need and then funding your business are some of the most important steps in starting, growing, and expanding your business. The process can be intimidating and the financial market is saturated with options — some that are costly. So how do you choose what’s best for you?

The good news is you’re not alone. Get your business up and running with help from experts and SBA-guaranteed loans. We know banks often perceive risk in lending to small businesses, so we help reduce that risk for the lender and make it easier for you to access capital.

What are the benefits of SBA-guaranteed loans?

Our guaranteed loans generally have rates and fees that are comparable to non-guaranteed loans – so you’re not missing out on competitive terms. We also walk you through every step of the process as some loans come with continued support to help you start and run your business, so you don’t have to go at it alone.

With SBA-guaranteed loans, you also benefit from lower down payments, flexible overhead requirements, and no collateral needed for some loan options.

How can I get my business lender-ready?

Before applying for a loan and meeting with a lender, make sure you have:

  • A business plan: Almost all lenders will want to see a well thought-out business plan so they can understand the big picture behind your business.  
  • Financial projections: Lenders want to know that you have a plan for how you’ll use your loan and how you will pay it back. Usually lenders will want projections for three years out.
  • A solid credit history: Lenders use credit scores to determine credit risk and interest rates, so a strong credit history will play to your favor.
  • Collateral: Many lenders require you to use another asset (e.g., a home, car or inventory) to guarantee your loan.  
  • Industry experience: While not required, having industry experience under your belt is helpful in accessing credit. Firsthand knowledge about your industry and the market can strengthen your prospects of getting a loan.

How can I secure an SBA-guaranteed loan?

To get matched to an SBA-approved lender and find the best loans to start and grow your small business, use the SBA’s Lender Match tool.

This free online referral tool connects small businesses with more than 800 SBA-approved lenders across the country that participate in the online referral program. The process is simple: Answer a few questions about your business, and you’ll receive an email in two days with potential lenders who are interested in working with you. From there, you’ll be able to compare rates and terms, and complete applications.

For additional help navigating the lending process, we encourage you to connect with your local district office or SBA resource partner — SCORE, Small Business Development Center, Women's Business Center or Veterans Business Outreach Center — or visit www.sba.gov/lendermatch today.

SOURCE: https://www.sba.gov/blog/find-right-loan-your-small-business



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