SBA Loans Are Available
Nov 22nd, 2010 @ 9:55 AM by Debbie Dragon
SBA loans are loans that are made through a traditional lender but are partially guaranteed by the SBA (Small Business Administration). While some people might think that the SBA makes its own loans, this is simply not true. The SBA guarantees these loans, up to 90% of the loan value so that the lender does not take full culpability. Currently, funding for SBA loans is readily available, that is if you can get approved by a lender. Lenders across the country have tightened standards for loan underwriting, making it harder to qualify for a business loan of any kind. The good news is that SBA loans are usually a little easier to get approved for.
The government knows that small businesses help to drive the economy and in tough economic times like today, it is critical that small businesses are operational. Many small businesses across the country would love to hire new employees and expand their businesses, but without funding are unable to do so. This is why government funding has been recently increased for SBA loans.
If you are a business getting ready to apply for such a loan here is what you should expect.
- Understand that 100% financing does not exist with SBA loans. You must be able to show that you are investing some of your money into the business in order to qualify.
- Be prepared and have all of your financial papers ready. You will need to provide to the lender business as well as personal tax records, bank statements, any profit and loss statements, business income, business expenses like lease papers, etc.
- The lender may or may not need you to put collateral up for your loan. Most lenders do waive this requirement on some SBA loans, especially small loans.
- Be prepared to show you have a good credit history and credit score and that you are capable of repaying the loan. Yes, your credit score will be checked, just as it would for any other loan you might decide to apply for.
- Finally, make sure you shop around. There are numerous lenders who offer SBA loans, and all lenders do not have the same qualification requirements. Before applying it may be in your best interest to check out several lenders to decide which one will suit your needs the best.
Debbie Dragon is a full time freelance writer and the co-owner of ReliableWriters.com.