You might be a self-employed professional running your own services, such as a doctor or lawyer. You might be someone who is starting a small business. In any of these cases, you should consider getting an SBA loan. I will describe the reasons for this in today’s article.
The federal government subsidizes the SBA loan program in order to guarantee loan repayment in case of default. What this means is that if you are not able to repay the obligation, the federal government will repay the lender in your stead. This has freed up a great deal of capital for smaller companies and self-employed individuals. Typically, banks do not normally prefer to lend into this segment because it represents a significantly higher financial risk.
As such, you should seek out funding of this type if you own a new company and you are having difficulty getting funded through traditional banks. You could attempt to go to nontraditional lenders, as well. Typically, these have higher interest requirements.
Although there is some additional paperwork to deal with when seeking out funds through the SBA loan program, the benefit often outweighs the price for new small companies. This also goes for professionals, such as lawyers and doctors trying to set up a new private practice. Setting up these practices can be expensive upfront. This is especially true while you are building your customer base.
Having funding to get your operations functional can be very useful. The Small Business Administration can help you obtain the funding you need. You should contact the local chapter of the SBA for further information on their programs.