Everything You Need to Know About the SBA 7(a) Loan
Launching a new business can be a complicated process. This is a huge undertaking that usually requires some financial assistance to get things underway effectively. You have many options to get the financing you want, but one of the oldest and most common ways is through an SBA loan. The Small Business Administration has helped make the dreams of countless entrepreneurs come true. Before you jump at the chance to apply for one of these loans, it’s essential that you understand how they work and what benefits they provide.
Determine Your Eligibility
SBA 7(a) loans aren’t open to just anyone. There are strict guidelines for which types of business may apply and ultimately qualify for this financing. First off, you must own and operate a small business. The SBA has stringent definitions for what this entails. Review these to ensure your business fits. Also, you must have a for-profit business and one that operates in the United States. You should also have reasonable invested equity and should have explored other sources of financial assistance, such as your own personal resources, before applying for an SBA loan. You can’t be delinquent on any current obligations to U.S. government entities. In addition, be prepared to show a need for the funds and how you intend to use them.
What to Bring to the Table
As you apply for one of these loans, the SBA will require specific information from you. First, you’ll need to provide both personal and business financial information. The better your financial picture looks, the better chance you have of securing the loan you need. It’s particularly important that you can put some money down when you apply. Also, the SBA will pull your personal and business credit. You’ll need a good score to qualify for this financing.
Find the Right Lender
Your next step is to search for and find a lender who can help you with an SBA loan. This lender will work closely with you as you set up an online account. You can search for local lenders near you, or you can get referrals from other business leaders you may know. Your current institution may even offer this type of financing. Shop around to compare rates and qualifications. It’s important that you choose a lender you feel comfortable with.
If you know an SBA loan will help you get your new small business on track, this could be a viable financing option. Consider these tips and move forward with confidence.