An alternative to traditional business loans is the government small business loans, created by the federal government’s Small Business Administration (SBA). It is a series of programs designed for small business owners who would like to start a business, are in need of additional working capital or need to purchase land or equipment but may not have adequate credit to qualify for a regular business loan.
The SBA will guarantee up to 85% of bank loans up to $150,000 and 75% of bank loans up to $2 Million under the SBA 7(a) program for working capital. Loan terms are for a maximum of 7 years at interest rates of 7-9%. For loans in excess of $100,000, security in the form of business or personal assets is required. Other SBA programs include the SBA 504 loan program for the acquisition of fixed assets such as purchase of land and improvements or machinery. The program has a maximum term of 25 years and for secured loans of up to $4 M. The funds can be made available as a line of credit or term loan.
However, SBA documentary requirements can be extensive, including but not limited to financial statements and tax returns, detailed business plans and financial projection for new businesses. Moreover the type of eligible businesses is limited and the funds must be used in accordance with the guidelines set by the SBA. Personal guarantees will also be required for the remaining portion of the loan not guaranteed by the SBA.
We at Merchant Advisors provide an even better alternative for existing businesses through the Merchant Cash Advance or Merchant Check Advance programs. Documentary requirements are minimal and there is no need for security or collateral. Approval is within 1 hour of application and our approval rate is 95%. Merchant Advisors do not dictate where the funds will be used and repayment is easy. We purchase future incomes from your credit card purchases or check deposits and apply competitive interest rates, payments of which are tax-deductible.