Advantages for SBA Handicapped Assistance Loans

SBA loans present many opportunities for those that normally would not qualify for loans. Starting a business is hard enough, but when lenders will not look at you, it makes it tough to get started. If you are handicapped, the SBA provides a special program called Handicapped Assistance Loans or HAL. These loans allow handicapped people who cannot obtain employment to start their own businesses. There are several advantages to these types of loans. Let's look at a few reasons that SBA loans are a good idea.

Increased Opportunity

The reasoning behind the program is to help those that cannot be employed anywhere else come up with their own way to make a living. For example, if you cannot find a job because of your condition, you could start your own home business online. However, it will probably take funds in order to get started. That's where HAL comes in. They will provide you the opportunity to work for yourself even if you cannot secure a job.

Guaranteed Loans

With these types of loans, the government is guaranteeing them. This means that more people who would not normally be approved can get a loan. When traditional lenders have to stand behind the loans that they write, they do not feel comfortable lending to just anyone. This often leads to only those with the best credit scores to get the bulk of the loans. With this program, you are more likely to be approved regardless of where you want to do business. You also will not have to pay loan insurance on top of your loan payment because the government is guaranteeing the loan for you.

Low Interest

Any time you loan money from the government, you can expect to pay a lower-than-average amount of interest on the loan. They set the federal interest rate for banks and therefore can give you the best deal available. The rate will usually only be a point or two above the index rate. When you go out into the private sector, you will often be charged a lot more for interest if you are even approved. Paying a lower interest rate on the loan could save you thousands of dollars over the life of the loan.

Longer Loans

Small business loans in the private sector tend to be for shorter terms. When you get an SBA loan, you can rest assured that it will be for a longer time period. It will usually be longer than you could acquire from a commercial lender.