If you are a small business and looking for a loan, SBA loans are the best place to go. In 2019 SBA played a role in granting over $25 Billion in loans to small businesses. These loans helped small businesses grow, adapt, and reinvest into their business and turn into the U.S. economy and infrastructure. Due to the SBA’s efficiency, Business loan approval, on average, is the highest it has been in over a decade.
SBA loans are high for small businesses because they tend to have lower interest rates and longer terms that many alternative funding sources; however, getting these types of loans the process and cab very tedious and daunting. Due to this, the process can be lengthy, and many businesses may not qualify in the end. Although this may seem overwhelming, don’t get frustrated. Many businesses’ SBA is the best way to go.
Here are 3 Items To Help You With These Loans
1. Have A Plan
Before applying for an SBA loan, you should know your financial pictures, such as your credit history, credit scores, and other risk factors. It would help if you also had a good understanding and to be able to articulate the pros of your industry and how you differentiate yourself from your competitors. The combination of these items will best position you to get an approval for the SBA loan.
2. Know-How Much You Need
There are many SBA loan programs, and each one has specific uses and requirements. For example, the 504 loan is for land, building, and renovation. At the same time, other loans help with developments, working capital, and export markets to streamline different business funding aspects. The most popular is the 7(a) loan program. The 7(a) allows a business to borrow up to $5 million with a 10-year repayment plan. If this money is used for Real Estate or equipment, these loans can be extended up to 25 years.
To help you determine how much you need, we recommend writing out a budget that details what you plan to use the money for and the projected benefits your company will gain by having this one. A written out plan will help the lender see your long-term vision and let them know that you have a well thought out plan.
3. Know Your Numbers
The SBA Does not have a minimum personal credit score requirement, but individual lenders may. Also, certain SBA loans—7(a) loans up to $350,000 and Community Advantage loans—require lenders to prescreen applications using the FICO SBSS score. This score can consider the owner’s credit data and information from a business credit report and financial data. The SBA requires a minimum score of 140 (on a scale of 0-300) though many lenders require 160 or above.
4. Consult With an Expert
You have all the tools you need to do this yourself, but we often work with people who need help preparing their stories and presenting their information to a lender. Our team of consultants works with multiple lenders daily, and they know what to look for and the best way to show your case. If you need any help with navigating this process, we will introduce you to one of our senior Consultants.
5 Tips For Getting One of The Best Business Loans | Nav. https://www.nav.com/blog/5-tips-for-getting-one-of-the-best-business-loans-516791/