If you run a small business at some point you may need additional funding. There are many ways to go about doing this, and I’m definitely not advocating any one over all others. However, if you’ve decided not to use venture capital, or friends and family and are instead looking to borrow money to pay for your new business venture, I think an SBA Loan has many advantages. We will discuss some of those in today’s article.
First, there is a common misunderstanding that since the Small Business Administration is a government run organization it will take forever running through miles of red tape in order to get funded. This is usually not the case, in fact with the assistance of the SBA loan councilors it can often be faster to get funded in this way than through a traditional loan program. You also take less risk when it comes to selecting lenders and loans as this has already been done for you, we’ll talk about that more in a bit.
So what can they do besides help you find a loan in a reasonable amount of time? As part of the loan program they will assist you in running through some other requirements as well. You must have a business plan to borrow from most banks these days, and the small business administration have staff on hand to help you create one. This can be a very powerful tool when used appropriately and you should ask about this service at your local office. Having a good business plan helps you get your necessary funding, among other things.
As mentioned earlier the SBA will work with you to get you approved for a loan within the SBA loan program. These loans meet strict criteria in terms of interest, terms and conditions, and fees. Your local agent can explain these conditions to you so you know exactly what to expect as you move through the process.