If you are a business owner, you probably have heard about Small Business Administration (SBA) loans and their benefits. But are they hard to get? In today’s blog post, we answer this question and offer some useful business financing tips.
What Are SBA Loans?
SBA loans are loans that are partially guaranteed by the Small Business Administration (SBA) to help Americans start or grow their businesses.
The backing of the SBA reduces the risk for lenders and makes it easier for small businesses to obtain financing.
The two most popular SBA lending programs are 7(a) and 504. 7(a) loans are general purpose loans that can be used for everything from working capital to furniture, fixtures, and supplies. 504 loans, on the other hand, are geared toward major assets such as land or heavy equipment.
To learn more about SBA loans, check out our previous posts, “Some Frequently Asked Questions About 504 Loans” and “Some Frequently Asked Questions About 7(a) Loans.”
Are SBA Loans Hard To Get?
SBA loans are typically easier to qualify for than bank loans. In fact, businesses that are turned down by banks are sometimes able to qualify for SBA loans.
Regardless of whether you want to apply for a 504 loan or a 7(a) loan, you’ll need to meet some basic requirements such as:
- Operate for profit
- Be considered a small business, as defined by SBA
- Be engaged in, or propose to do business in, the United States or its possessions
- Be able to demonstrate a need for a loan
- Use the funds for a sound business purpose
- Not be delinquent on any existing debt obligations to the U.S. government
- Be creditworthy and reasonably assure repayment of the loan
However, an important difference between 504 loans and 7(a) loans is that 504 loans are available exclusively through Certified Development Companies (CDCs), nonprofit entities that are regulated by the SBA.
In any case, the contents of your loan application will vary depending on the factors like the purpose of your loan and the amount of money you need. Ask your lender as early as possible during the process what documents you’ll need so you have time to get organized.
If you have more questions about SBA eligibility, contact our experts today. We’ll be glad to answer your questions and help you find the financing solution that works for you.
Gellyfish: Certainty of Execution in Commercial Loans
At Gellyfish Commercial, we offer commercial real estate financing solutions with the certainty of execution you need to take your business to the next level.
We are located in Riverside, and work with clients all over California and beyond. Contact us today by email (info@gellyfishcommercial.com), telephone (877-800-4493), social media (Facebook, Twitter, LinkedIn), or through the live chat on our home page to schedule a free consultation.
