Small businesses struggle with finances and maintaining their books. Often, small business entrepreneurs have to make quick decisions on where to spend their cash. Many small business owners turn to SBA loans to get the money they need as quickly as possible.
The SBA loan program is designed specifically for small businesses and gives them access to loans that can be used for working capital or expansion purposes. Because of the small size of these loans, they are pretty easy and quick to get approved. There are two ways that an entrepreneur can take advantage of the SBA loan program: through the government’s direct lending program or a bank.
The direct lending program is available only in specific regions and requires that you submit your application via a local SBA office. The best way for an entrepreneur to get a loan through this method is by contacting one of the regional offices directly or using one of the many online resources available to apply for an SBA loan.
The government’s direct lending program offers a variety of loans, but you have to pay a fee upfront when you submit your application. However, just because you have paid this fee does not mean that you will be able to receive an SBA loan from this source. You must still meet all eligibility criteria before being eligible for an SBA loan from this source. You must also be ready when it comes time for you and your business partner(s) to submit your application materials to the government office in charge of administering these loans (called “SBA Field Offices”).
The best way to secure an SBA loan is by:
Building A Good Credit Score
Whether you have a steady job and good credit or just a part-time job, building a good credit score is best to get approved for an SBA loan. According to Lantern by Sofi, you can build your credit record by paying bills on time and making payments to creditors on time and in full. If you have no credit history, you will need to start with the SBA’s “Express” program, which requires that you pay off all your debts before applying for an SBA loan.
The SBA usually requires a business plan that outlines how your business will grow and what it will do for the community, state, or nation. This business plan should detail your business’s mission statement, operating procedures, and how you plan to finance your business. An excellent way to prepare a business plan is by using a template available on the SBA website.
Ensure That The SBA Loan Applied Is The Right Fit
The SBA offers loan programs in many business areas, ranging from construction to manufacturing. You will have to choose the program that is right for your business. Each program has different requirements, application forms, SBA loan rates, and fees. Many programs also have a maximum amount of money available per year or term that you can borrow. The SBA website has an “Applying for an SBA Loan” page where you can find the appropriate program and fill out the application forms.