Easy way to get business loans
In this article we’re going to talk about SBA business Loans. The official site is < www.sba.gov> , You have to visit the site, to see all the information regarding loans for businesses. Let’s start, First go to sba.gov then Funding Programs >> Loans >> Lender Match connects you to lenders ,on the same page click find lenders and it will bring up the page that will take you through the questionnaire you will be matched with qualified lender a step-by-step process. Well, when you put your information the purpose of your loan the amount and at the end you will get recommended lenders. You do not get the loan directly from the SBA. You will get it from the lending partners. You can get anywhere from five hundred dollars to five and a half million dollars to fund your business.
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Who can get the business loan:
You will have different eligibility requirements. You have to have a business, that officially registered and operates for profit. You have to conduct your business in the united states, have invested equity as your own time and money into the business and you have to exhaust financial options, you cannot get funds from any other financial lender. If you scroll down you also can obtain help from funding counselors.
Four types of business loans :
1. SBA microloans:
If you look at those options for loans, the first one is SBA microloans. Those are essentially perfect startup loans, because they can be as small as $500 all the way to $50,000 and average loan amount right now is around $13,000. The interest rates will be anywhere between 8% to 13% and is best suited for starting a new business. It can be used for working capital inventory purchase, your supplies furniture fixtures machinery or any type of equipment that you need for your business. You cannot use it to finance your other loans or purchase a building or piece of land. The maximum turn of this loan is six years . You can apply for this loan even with poor credit. But it will be tougher to get the loan.
2. SBA community advantage loans:
let’s move on to the next one. You can get up to $250,000 with SBA community advantage loans. Interest rates they range anywhere between 7% to 9%. It can be used for your normal business operations including purchasing an inventory and working capital. These type of loans are targeted for underserved communities. Borrowers qualify if they have been in business for less than three years and they cannot qualify for funding any other place. You can borrow up to $250,000 with maturity 10 years for working capital and if you’re spending your money on fixed asset it will be up to 25 years.
3. SBA 7(a) loans:
Next let’s look at SBA 7(a) loans. Here you can borrow up to 5 million dollars and it’s best suited for growing your business. The rates a little bit lower than for previous two. They anywhere between 5%- 9.75% as far as SBA express loans. Which is part of 7(a) loans, they will have higher interest rates and can be used for purchasing equipment supplies, working capital you can use those loans to purchase real estate. This real estate should be part of your business process and used in your business to be eligible for one of those SBA 7(a) loans. your personal credit score should be at least of 790 or higher. you should be able to show several years of annual revenue and have been in business for at least two years.
3a.Type in 7(a) loans:
There are multiple types of loans under the 7(a) loans program. They start with a standard 7(a) loan. Which is maximum loan amount of 5 million dollars and you actually can negotiate the interest rate. They have 7(a) small loan which is maximum amount $350,000. SBA express current maximum amount is $350,000. But you will receive the response from the SBA regarding your application within 36 hours, which is great. The next one is called export express credit up to half a million and respond to your application will be provided to you within 24 hours. Export working capital, it’s for businesses that can generate export sales and need additional working capital. It’s maximum loan amount of 5 million term of 12 months. It just shows you how many different types of loans under 7(a) loans program.
4. SBA 504 loans:
last type of SBA loans is SBA 504 loans. Same as 7(a) type loans. They’re up to 5 million dollars and they best suited for growing business current rates are anywhere between 2.91% to 3.76% . loan proceeds can be used for real estate machinery and other major business expenses startups. Can use these type of loans to basically promote creation and growth, you can borrow up to five and a half million and the term for the loan will be 10, 20 ,25 years, Depending on the type of loans. You need to put up 10 of the loan 20 in some cases. Which can be really difficult for some companies .
Should I start a business on a loan?
It’s not even that good of a question though, but we will going to discuss about this. Now the think is here should you start a business on a loan? In a word the answer is No you should not, only an idiot start a business on a loan. Let me tell you Why you should not start a business on a loan? Because it means that you are not good at in business, Are you sure that you can make profit at that time when you starting of your business? In here you have got no money, why are you starting a business with no money? The worst time to start a business is when you have got no money. Please Don not tell me that .. ooh but so many people started with no money like the magazine, the article that you wrote like they all start from nothing with nothing, I get that point. That’s not you, do not compare yourself to all these great founders and entrepreneurs, most of them did not make it. You see one person that makes it and become successful .
But you do not see the 10,000 person just die financially. Are you sure you are exception? You’re not that exceptional one believe me, you are not, I am not, right? People make mistake and tell this from their experience, Most of them said they started and failed at 15-20 businesses and after borrowing money. They borrowed money from friends, family, relatives, credit card, and in the end it was around $180,000-$250,000 in debt. How tough that was because most of them didn’t know how business works. They even didn’t have the abilities to actually generate revenue. They did not know how the marketing works, how sales works, how business works, Did not even read a financial statement. And then they learned from it, until they developed their skill set the ability to generate revenue through communication, through copywriting, through closing, then their business started to work.
Should You start a business on a loan?
One of them said “The business I started, that business was not the issue, I was the issue. I was not a good business person. I was not good as an entrepreneur. But Once I have the skills, now people look at what I do. I have the Midas touch, everything I touch turns into gold. Well, back then everything I touched turns into shit, right? When I had Zero skill, whatever business I started didn’t work. The Business did not work because I didn’t know how to make them work”. So you need to have the ability to close, you need to have the ability to sell, you need to have the ability to self manage, you need to have the ability to lead, you need to have the ability to develop systems if you want to be successful as an entrepreneur. Now the think is here, if you do not know any of these things, you do not know how to negotiate, you do not know how to sell, you do not know how you the market is working, you do not know how to lead.
Then man are you are not ready to start a business. Now think that you do not need to know everything. But you better have some fundamental skills. That is really a fact, statistics, most businesses do not make it. And I know some people are going to troll they will say oh but I’m the exception, I’m different, I’m smarter, whatever talk is cheap, go and do it, don’t be a keyboard warrior just go and do it. But for most I’m talking to you, who are coachable please do not start a business on a loan.
If you know how to generate revenue, if you know how to sell, you could sell to bring that revenue in get some income coming in. More money doesn’t solve your problem more capital doesn’t solve your inability to generate revenue. In fact, it makes it worse. Once you burn that money, what are you going to do? Don’t went through what most people went through. Learn how to generate revenue first, use that money to fund your business. Once you have a model that works, once you have an offer that works then you could get a loan to take it to the next level. But don’t think that loan would solve your problem when you’ve got zero revenue, If you think that loan will solve your problem, when you lack leadership skill, loan will solve your problem if you do not know how to sell a single piece of paper bag and loan will not solve your problem of lack of confidence, it will not do that. Please think before taking a loan.
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FAQs
What to consider before taking a business loan?
Loan term, Financial valu of your business, Flexibility and size of the loan.
What to expect when asking for a business loan?
Credit scores, revenue ,Years in business, business size, business plan and financial document.
How important is a business loan?
Depends on your business size, you should apply for a loan that time when you already won a business and you want to grow it . We should not start a business on a loan, i already explain why we should not.
