For many of us, starting our own business or buying a house seems like an unrealistic dream. It normally takes years and years of work in order to earn enough money to do these things.
However, if you take out a loan with the correct company, these dreams can become a reality. In this article, we will be discussing the SBA and how you can go about taking out a loan. More so, we will mention everything that you need to know about the process and being eligible.
- About the SBA
- Loans for Borrowers
- Benefits of SBA-Guaranteed Loans
- Eligibility Requirements
- Loans for Exporters
- How to Apply for a Loan
- Contact the SBA
- Find Lenders
- How to Get Ready for a Loan Application
- Need Help?
About the SBA
It is very important that you do your research before taking out a loan.
For this reason, if you are considering contacting the SBA for a loan, you should ensure that you know enough about the company beforehand.
In short, the SBA works to assist small businesses in starting, expanding, growing, and recovering.
Initially created in 1953, the U.S. Small Business Administration has helped a number of business owners achieve their dreams.
This is the only cabinet-level federal agency in the United States, making it a great option for just about anybody.
Since its development, the SBA has delivered millions of loans to thousands of business owners across the country.
If you would like to know more about the company, be sure to visit their official website. Here, you will be able to read about their mission statement and various initiatives.
Loans for Borrowers
If you have decided to take out a loan with the SBA, you have various options to choose from.
It is very important that you discuss your options with an SBA representative in order to understand which one will best suit your needs.
The 7(a) loan options guarantee portions of a total amount, capped interest rates, and limited fees. On the other hand, you can opt for a 504 loan.
These loans are long-term and at a fixed rate. More so, they are often used to purchase or repair real estate, equipment, and other assets.
The final option is a microloan. This is the SBAs smallest loan program and provides clients with $50,000 or less.
These loans are often taken out in order to start up or develop a business.
Benefits of SBA-Guaranteed Loans
There are a number of benefits that come with taking out a loan through the SBA. For starters, the SBA loans often come with rates and fees that are comparable to non-guaranteed loans.
On top of this, some SBA loans come with additional support and assistance in order to help you start up your own business.
As we have already mentioned, there are various loan options for you to choose from.
For this reason, the SBA is the perfect company for just about anybody looking to take out a loan. No matter what you may need the money for, the SBA will be able to offer assistance.
There are also a number of unique benefits that come with taking a loan out with the SBA.
For example, you will experience lower down payments, flexible overhead requirements, and no collateral for certain loans.
Like most loan companies, you will have to meet a number of requirements before the SBA can assist.
Lenders and loan programs need to make sure that you are responsible when it comes to paying back your loan.
In general, the eligibility requirements are influenced by what you need the money for and how much you are taking out.
More so, if you are taking out the loan to start a business, the size of your business will play a major role.
Important Factors for Business Owners
For starters, you will only be eligible for a loan if the money will be used for a for-profit organization.
More so, you will have to do business in the USA. On top of this, you will need evidence to prove that you have invested equity.
Loans for Exporters
It is very important to note that most banks view loans for exporters as risky. This can make it difficult to be approved for loans for day-to-day operations and debt financing.
For this reason, the SBA has created a number of programs that make it much easier for small US businesses to take out export loans.
If this interests you, be sure to contact your local SBA International Trade Finance Specialist or the SBAs Office of International Trade.
Find a Suitable Lender
In order to take out a loan, you will first need to find a suitable lender.
Luckily, the SBA works alongside a number of companies in order to ensure that clients are provided with various options.
We will discuss finding a lender in more detail later on.
How to Apply for a Loan
There are a number of steps that you will have to follow in order to apply for a loan. If done incorrectly, you risk your chance of being approved.
For this reason, it is very important that you do your research beforehand.
The first thing that you will need to do is decide which loan is better suited to your needs. Once this decision has been made, you can go about contacting the SBA.
This can be done on the official website or through their contact details provided online.
Visit the Official SBA Website
The official SBA website will walk you through the appropriate steps.
On top of this, the website is incredibly informative and will help you decide which loan and lender is better suited for your wants and needs.
Contact the SBA
There are a number of reasons as to why you should contact the SBA.
For starters, if you do not know which loan is better suited for your situation, SBA representatives will be able to provide you with advice.
On top of this, the SBA will connect you with a lender according to how much money you require and what the money will be used for.
SBA Contact Details
There are a number of ways in which you can contact the SBA. For starters, there is a communication channel on their official website. However, you can also call them at 833-572-0502.
There is also a link on the website that allows you to email their representatives. You can reach them by emailing them on firstname.lastname@example.org
They are headquartered at 409 Third Street, SW, Washington, D.C., U.S.
In order to take out a loan, you will first need to find a lender. While on their website, you will notice a ‘Find Lender’ button on the home page.
After selecting this option, you will be directed to the application form.
Before applying, you will need to get a number of documents ready.
The lender is highly likely to ask to see a number of forms, including a business plan, your credit history, and financial projections.
Discuss Matters With Your Potential Lender
Once you have found a potential lender, it is essential that you discuss your needs and wants.
You will be matched within 2 days of applying and, once coming to an agreement, you should be provided with the money within the following weeks.
How to Get Ready for a Loan Application
As we have already mentioned, your potential loan provider is likely to ask to see a number of documents before providing you with the money.
The first thing that you will need to do is create a business plan in order to show exactly what the money will be used for.
If you need help creating one, you can follow the SBAs free business plan guide on their official website.
On top of this, you need to provide the lender with a form that states how much money you need. You will also need to show proof of your credit history and provide some financial projections.
What About Collateral?
Finally, industry experience is very helpful when it comes to taking out a loan, so be sure to show proof of this during the application process.
Some lenders will require that you use another asset in order to ensure your loan. This can be a number of objects, including your home, car, or inventory.
The collateral used will depend on how much money you take out and what it is used for.
If you need additional help, be sure to contact the SBA before sending in your application.
On their page, they include a FAQs section that can also be used if you have any questions regarding taking out a loan.
The SBA even has a social media page that offers valuable advice on how to improve your chances of being approved for a loan.
The SBA includes a number of privacy policies that are put in place in order to ensure your information is kept safe.
Your details will be kept private at all times, meaning that you have nothing to worry about when applying for a loan online.
You have various companies to choose from if you are looking to take out a loan. However, the SBA should be on your list of considerations for several reasons. You can choose from a few loans and lenders. The SBA also includes privacy policies to keep your information safe.
Note: There are risks involved when applying for and using credit. Consult the bank’s terms and conditions page for more information.