Starting A Small Business?
For many people, having an idea for a business is the first step toward making a dream come true. However, as with most aspects of business, money is an important component of turning dreams into reality.
Yet, for those whose desire for entrepreneurship is a driving force in their life, they will find the money needed to get their business off the ground. The Austin metro area is growing fast and it’s a great time to get started on your dream. While there are many options from which to choose, one of the most popular and effective is an SBA loan.
What is an SBA Loan?
Managed by the U.S. Small Business Administration, an SBA loan is a government loan, offered through banks that act as lending partners across the country. While the SBA does not directly make loans to small businesses, it does set the guidelines for the loans and guarantees a percentage of each loan. By doing so, it decreases the risks of its lending partners, while increasing the chances small businesses will receive the financing they need.
How to Qualify for an SBA Loan
To qualify for an SBA loan, a small business must meet certain criteria related to size requirements, being in good financial standing, and also being part of a for-profit industry.
However, SBA loans cannot be made to businesses that are deemed to have access to financing options that offer reasonable terms. In addition to these requirements, any business seeking an SBA loan from a lender must meet the credit qualifications of the lender from whom they are seeking the loan.
Advantages of SBA Loans
For businesses that obtain SBA loans, they are able to take advantage of many benefits. Two of the best include lower down payments and longer repayment terms, which helps a business manage its cash flow while spending less on repaying debt. Other advantages include up to 90 percent financing, loan lengths up to 25 years, no balloon payments, availability of fixed and variable rates, and loan amounts that can surpass $11 million.