Should you get a SBA Loan?

SBA Loan

When running a small business, you will find that there will be times at which you will need to get funding from an outside source. It may be that you have a great idea that you would like to put into action, and will need seed money to get it up and off the ground. You may already be running a company, and the demand for whatever service or product it is that you provide, has risen. In order to keep up with the demand, you may find that you will have to make expansions to your company, such as purchasing additional equipment and machinery, or hire on new employees or workers. Whatever the case, you will need to go out and get financing in order to make these expenditures. The kind that I will be talking about today is a SBA loan.

There are certain things that contribute to the likely hood of being eligible for this kind of loan. Since one of the main goals of the SBA, or Small Business Administration, is to help small businesses expand and become more successful, they are especially useful to those who want to grow their business. A SBA loan is most often given to companies who need financial backing on buying things to enable their company to become larger, such as equipment or land.

If you are just starting up a business, this type of loan is not generally one that would be beneficial for you to aspire to. Venture capital, or having family members or friends invest in the start-up of your business endeavor, is the option that most people in this specific situation tend to go with. The reason for this is that you will have very slim profit margins if any during the first few years of your company. In fact most new companies do not generate any profit at all during the first year. As such you must keep your expenses as low as possible in order to have the necessary operating budget during this fragile time of your company. Because of this many new business owners try to avoid loans as their primary funding as this adds the additional expense of interest. On the other hand, if your company is already established, and you are looking to get financial backing in order for it to experience growth, and become more profitable, a SBA loan is a viable option.

For more information, go to SBA at

Should you get a SBA Loan? was last modified: September 30th, 2011 by Amit Kraidman
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2 Responses to Should you get a SBA Loan?

  1. Shakita says:

    Helpful facts! I have been previously hunting for something such as this for a while now. Many thanks!