SBA Loan Program for Solar Energy and Conservation Enterprises: Dangers
The SBA loan program for solar energy and conservation enterprises is comprised of several different loans that focus on helping small businesses become more energy efficient and environmentally conscious. The SBA stands for the Small Business Administration and is a government-sponsored agency that guaranties loans provided by third party lenders to small businesses throughout America. The loans that make up the program for solar energy and conservation enterprises include the SBA 7(a) Loan, the SBA 504 Certified Development Company (CDC) Loan, and the Pollution Control Loan. When deciding if you should take your business in a green direction with the help of an SBA loan, it is wise to consider the dangers to your business that may be involved.
Overextending Your Limits
Before deciding if an SBA loan is right for you, it is important to know your financial limits and understand what kind of position you would put your business in by taking out a loan to fund solar energy and conservation enterprises. If your business cannot realistically, financially handle the responsibility of such a loan, it would be in your best interest to not take the loan or to lower the amount you initially wanted rather than putting your business in a financially unstable place. While SBA loans are certainly meant to help small businesses, you must remember that they are still loans and loans always need to be repaid. One good thing about using an SBA loan for solar energy and conservation enterprises is that you will be able save your business a good amount of money by making changes with the money from the loan; on the other hand, if your business is not strong enough to support the time between when those changes are being enacted until the time when you have paid back the loan, you could find yourself in a bit of a financial bind.
Poor Planning
Another danger that exists when it comes to SBA loans is that of poor planning. You should have a very clear idea of how you will spend the loan money before you have received the loan. You need to make sure that how you plan to use the money is an approved way according the loan criteria. If you plan poorly your loan money will be misused and your business's finances could suffer. Make your original usage plan as realistic and feasible as possible as stick to it as closely as you can. This will ensure that your funds are used in the most efficient way while simultaneously staying certain that you are using your funds in appropriate ways.
Overextending Your Limits
Before deciding if an SBA loan is right for you, it is important to know your financial limits and understand what kind of position you would put your business in by taking out a loan to fund solar energy and conservation enterprises. If your business cannot realistically, financially handle the responsibility of such a loan, it would be in your best interest to not take the loan or to lower the amount you initially wanted rather than putting your business in a financially unstable place. While SBA loans are certainly meant to help small businesses, you must remember that they are still loans and loans always need to be repaid. One good thing about using an SBA loan for solar energy and conservation enterprises is that you will be able save your business a good amount of money by making changes with the money from the loan; on the other hand, if your business is not strong enough to support the time between when those changes are being enacted until the time when you have paid back the loan, you could find yourself in a bit of a financial bind.
Poor Planning
Another danger that exists when it comes to SBA loans is that of poor planning. You should have a very clear idea of how you will spend the loan money before you have received the loan. You need to make sure that how you plan to use the money is an approved way according the loan criteria. If you plan poorly your loan money will be misused and your business's finances could suffer. Make your original usage plan as realistic and feasible as possible as stick to it as closely as you can. This will ensure that your funds are used in the most efficient way while simultaneously staying certain that you are using your funds in appropriate ways.
