04/29/2024 | News release | Distributed by Public on 04/29/2024 07:06
Whether you are planning an expansion or need working capital, a small business administration (SBA) loan is a beneficial financing option for small businesses. Business owners benefit from flexible terms, lower interest rates, and lower payments. To attain these funds, borrowers need to meet specific standards and requirements. This guide provides a look at the types of SBA loans available, loan terms to consider, and how to become eligible and apply.
An SBA loan is a loan supported by the U.S. Small Business Administration. Designed to help small businesses cover a variety of expenses, this financing is offered only by SBA-approved lenders.
There are various types of SBA loans to choose from:
SBA loans have particular terms, conditions and eligibility requirements business owners must be aware of for a smooth application process. Here are seven terms that are important to understand:
The main difference between SBA loans and traditional business loans is that the SBA note carries an SBA guaranty and the borrower has to have access to the capital via conventional lending or from the business or business owner's personal resources.
SBA loans can be an attractive option for startups, as they offer lower rates than traditional loans. Generally, traditional financing options require more operational history for your business than SBA loans do. Their loan term limit is usually around 10 years as well. To find out about loan options and current interest, contact our SBA office today at 1-888-472-9778.
SBA loan benefits that may be particularly appealing to small businesses include:
There are also a few cons that are important to consider before applying:
If you feel an SBA loan is right for you, here are the steps you can take to apply for an SBA loan.
It's best to thoroughly review the criteria for SBA loan qualification before applying. Make sure your business and business needs fall into an eligible category and try to establish and build a good business credit score.
SBA lenders can differ significantly based on various factors such as their size, approach, and focus. Some SBA lenders may be large national banks with a more generic one-size-fits-all approach to SBA. On the other hand, smaller community banks and may specialize in serving local businesses, providing personalized attention and a deeper understanding of the community's needs. Additionally, non-traditional lenders like online financial institutions and alternative lenders have emerged in recent years, offering streamlined application processes and innovative financing solutions. Each type of SBA lender brings its unique strengths and characteristics to the table, catering to different business needs and preferences within the diverse landscape of small business financing.
Our knowledgeable SBA experts will work with you to understand your unique needs and offer a loan term and interest rates that suit your financial situation. Contact our SBA office to talk with our team at 1-888-472-9778.
Your lender will require various documents from you, including the SBA's borrower information form, business financial statements, personal financial statements, statements of personal history, and personal and business tax returns. While there are more you might need to provide, your lender will clarify this information for you.
Your lender will help you navigate the application process and be able to answer any questions you have regarding approvals, timelines, and specific requirements.
An SBA loan is a great way to finance big and small business needs, from expanding your business to purchasing upgraded company equipment. If you meet the eligibility requirements and believe an SBA loan might be right for you, the team at Mid Penn Bank can help you secure an excellent SBA loan option.
Disclosures
The material on this site was created for educational purposes. It is not intended to be and should not be treated as legal, tax, investment, accounting, or other professional advice.
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