A small business looking for funds to grow must look into the possibility of getting an SBA 7(a) loan.
Velma Morales and her family wanted to expand their business in Tampa with a second location in Miami. Merchant Advisors, a business financing company helped them to get an SBA loan and achieve that target.
“The SBA loan process went very efficiently and the entire team at Merchant Advisors was extremely helpful,” Velma said. “We had estimated the standard 20% overage in construction costs; however when expenses were a little more than projected, we went back to Merchant Advisors for more cash, and they made it work for us.”
There are some misunderstandings that the procedure to get an SBA loan is unusually lengthy and complex, however a qualified SBA lender can guide you through the essential steps. The overall time frame for loan approval is normally 45-60 days.
In case you are considering pursuing for an SBA loan for your business, right here are some of the most unusual questions and their answers:
What Is An SBA Loan And Why Can It Be A Good Option?
An SBA loan is a well-liked business loan made by a bank, but it carries the support of the Small Business Administration, which permits the lender to make loans that might not meet traditional standards. As it carries the support of SBA, an SBA loan can be a terrific funding solution in case you are low on collateral, have minimum liquidity or are a new business. In case your loan is approved, the SBA will guarantee between 75-85% depending on the loan amount.
What Types Of Businesses Qualify For An SBA Loan?
Many small businesses are qualified to apply for an SBA loan; however you have to be an operational and for-profit business to make the grade. Borrowers can use SBA loans for any business-related purpose, such as hiring new workers, purchasing inventory or business equipment, getting a new workplace and consolidating debt. SBA loans do have a number of restrictions. They can’t be used to purchase investment property, such as an apartment complex.
What Are The Key Factors To Qualify?
Approval is basically based on cash flow of a borrower and ability to pay back the previous debt. The banking institution and the SBA will evaluate your business’ financial history and your personal financial statements. They’ll need to see your credit score and how your business is doing, and will also consider the use of loan. The amount of cash you’ll need to put down to get an SBA loan is decided on a case-by-case basis.
What Details Do I Need To Provide To The Lender For An SBA Loan?
To apply for an SBA loan, entrepreneurs have to provide their current personal financial statements to the lender, three years of tax returns both business and personal, and some other things based on the loan deal. New borrowers can also need assistance putting together a business plan and getting their financials together. A bank can help and direct nonprofits, such as Small Business Development Center or SCORE in your area.
How Do I Get Started?
You will need a concept of what particularly you would use the borrowed amount for and how much amount of cash you’re requesting. As soon as you know that, you can meet with a lender. It’s essential to work with a lender that does lots of SBA lending, so you can work with someone who knows the rules and policies and how to get the SBA loan application done quickly and efficiently.